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1) Ongoing major renovation of my house
2) Purchased, renovated, and rented 1st investment property.
3) Secured a terrific new mining job based in Perth that will get me the hell out of fly in fly out.
4) Determined that i’d like to eventually become a property developer. I’ve a plan for the future all mapped out.
5) Became an active member on these forums and think this is the best site ever on the entire internet…ever.
6) Brother emigrated to the USA
7) Changed investment tack and now will do reno’s for the next few yrs.
The most positive year i can remember…seriously… as i’ve got direction, and momentum, and feelin good.Merry Xmas everyone.
Cabo Wabo
Thanks fella’s.
With your responses, and after quizing a mate of mine, & my accountant i’ve finally got my head around this. My general understanding to my own q’s are as follows:
1) Who legally owns the property?
The company (acting for the trust)2) Who’s name is on the title?
The company3) In who’s name is the debt? That is, does the bank lend to the trustee or the trust?
The company (acting for the trust)4) I am director of the corp trustee. When i garentee loans with banks when acting as director, if the trust goes bust, and the pty folds, am i liable for the debt? Yes
5) If a trust is deemed a property trader and as a result GST applies, who registers for the GST? The trust or the corp trustee?
The trust registers as the trustee is only “acting”.Gross, I’ve been told the trustee pty only does a BAS statement if it GST registered, and you only become GST registered if you think ur gonna make more than 50K/yr. As the trustee is not trading, and makes no income, then it doesn’t have to do the GST side of things even though it still has to do a tax return.
6) Who is the property trader? The trust or the trustee?
The trust is the property trader, as the trustee is only “acting”.7) If a trust is a GST registered property trader, does all profit that comes out have GST applied irrespective of who it is distributed to?
No. GST is paid on the services of tradies etc when they fix the property etc. When a property is then sold, profits are considered capital gains only if you are not a property trader. If you only sell say 1 or 2 props, then they are considered to be of capital worth to you, and profits made on them are termed “capital gains”. If you kept em for over a year, you would qualify for the CGT benifit.BUT, If you are a property trader, then the numerous houses you buy and sell are not “capital assets” to you, but are “production stock”, and when sold, do not produce “capital gains” but produce “business income”. This means that the CGT benifit cannot be applied because the props are considered “production stock” which produce business income.
Can a corp trustee be a primary benificiary of its own trust? I’ve been told the ATO frowns on this.
Yes it can, but its best not to do this, as for some reason it is to the detriment of asset protection. Why? Does anyone know the background behind this?9) How, if ever, can a GST registered property trading trust (say that fast..) take advantage of the CGT benifit? It can’t. It must keep the property for over a year and not be a Property trader.
Thanks everyone for you help. Please, feel free to add or correct my interpretation of all your input, as i may be wrong.
Kind regards,
Cabo Wabo
The most positive year i can remember…seriously… as i’ve got direction, and momentum, and feelin good.
