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Hi All, Just reading through this thread and thanks for all the contributions. I know it is quite dated now, however…are the relevant rules still the same as my summary below:
1. Possible to own home in family trust and live in it (i would be director of trustee company with wife and we would both be benefeciaries)
2. We pay rent to family trust
3. Family trust pays tax on rent but as it would be a new home there would be some deductions and so it would likely equalise any tax or result in a loss
4. We would loan money to this family trust which would then pay us the interest
5. Family trust would likely require additional capital each year as loan amount would be equal to property value so rent would not cover outgoings like rates, water, maintenance etc.
6. But, if i also hold other income producing assets in the trust like shares or bank accounts, these would assist in meeting any shortfall in cash required for trust to pay interest to me and meet outgoings thus providing income shortfall to meet that i have preducted in point 5.
7. Trust would probably still incur a paper income loss because of div 40 adn div 43 deductions etc this would help especially if residual income left.In a nutshell, forgetting about loss of asset protection on the loan i make to the trust, is this still a goer?
cheers all
