The $1M is capital gain.
How would you distribute it to maintain minimum individual tax? Family Trustee are husband, wife and 2 kids under 16 yo.
Very interested in your response.
A friend came to me with a challenge. How to distribute $1M from his family trusts and minimise tax.
He bought a IP in 2005 in his trusts and sold it recently. After all expenses, he has a balance of $1m in his trust which he wish to distribute over a period of time.
1. Wife $100k, Husband $100k, leave $800k in trusts…[Read more]
Thank you for all the response.
With regards to intention, we build those 2 units with the intention to live in.
We sub-divided the land into 3 lots; 1 existing and 2 new units.
1. We sold the existing unit. We should get the 50% discount CGT.
2. My brother moved into one of the new unit in April 2014.
3. Our family was supposed to…[Read more]
Quick question, so I understand that if I hold onto the IP for more than 1 year, 50% of the gain will be taxed only.
My brother and I purchased an IP 4 years ago. In Sept 2013, we commence construction of a new unit, subdivided and subsequently sold the new unit in early 2014.
Are we entitled to the 50% Capital gain tax…[Read more]
Hi Terry, The funny thing is that this was brought to my attention by a CBA mortgage manager. I can't deal with him since he knows too much about my financial position but he recommend that I research into trusts and mortgage broker.Is there anyone here specialising in trusts mortgage?Thanks in advance.ptn
Hi Terry,No offence taken and I agree, I don't understand trusts very well.Yes, the goal is to get higher borrowing capacity.In order to do this, I need an annual salary that is being paid by a company (or a trusts??). The 50k cash equity comes from refinance from the bank a year ago.I guest what I am asking is HOW I can do it. (I've been told…[Read more]
Hi Terry,1. The trusts has $50k cash equity. 2. The company will be a trustee of the trusts.3. The company will pay me (individual) a fee for service.4. Do I need to transfer the land into the company when it's just a trustee? confused why…If the company pays me as individual, then the bank only need to know about my income. Will they q…[Read more]
Thanks for your answer guys,The main reason I need to access the $50k now is because I need a bank loan for another IP. The bank won't lend me money because I do not have enough servicability (disregards how much equity or asset I have). I am told that the trusts can employ me to do investment activity and therefore pay a fee. In this case, an…[Read more]
Hi Michael,I got a bit excited and with all the editing, I missed out the important part.I have a family trusts which purchased an IP some time ago. This IP has some equity after refinance. I want this equity (borrowed $$ loan from bank) to distribute $50k to myself this financial year so that when I sell my subdivided lot next year I can c…[Read more]
Hi TerryWFor a DT or HDT, can a non permanent resident be a trustee?Also, when buying a new IP, you need to put in 5% or 10% deposit + cost, is this something that you can lend to the trusts now and get it back sometime in the future? ThanksPTN
The trusts purchase a new house for $300k. There is an $8k depreciation schedule p.a
Assuming there are 1 x Trustee (Husband) + 3 x Beneficiaries (Wife + 2 kids).
Letâ€™s say I create 300k units in this HDT to buy this house.
Letâ€™s say the rent is $300pw ($15600pa less agent)
Letâ€™s say the interest at 7.5% = ($22…[Read more]
Following your advice to research more, I bought a book called ‘Family Trusts’ by Nick Renton (as recommended in previous forum). I have to admit the first 8 chapter are boring or going around in circle (a drag). I hope the next few chapters will pick up.
From what I understand so far, trust isn’t giving me any advantange at all apart…[Read more]
Thats not necessarily true. If you add or remove beneificiaries to a trust, this could cause a resettlement to occur. This is when the ATO deems a new trust to be formed and all the existing trust assets transfered (ie sold) from the old to the new. This means stamp duty and possibly CGT on everything the trust owns.
Ouch. This is going to be…[Read more]
Another question, if my mother in law is not a permanent resident in Australia, can she still be a trustee? IE. She is a tourist in Australia?
And the same question goes for a company shareholder?
Your advice is very valuable. I am still pondering between a company (expensive setup and ongoing) or a family trust. I need to know the best way forward given the following scenario:
My family of 4 + my mother in law (5 trustee) . We buy an IP using this new family trust. If for some reason, we decided to remove my mother in law…[Read more]
I don’t want to approach an accountant or a lawyer at it will cost me $$$ just to say hello.
Thanks TerryW, you’ve given me a bit more confident in buying the family trust.
Sounds good. Thanks
I like to buy this family trust online. Any advise?
My intention is to move one of my IP into this trust.
We have a family of 5 (including my mother in-law). Hope it’s not going to complicate the process.
Please let me know your thoughts.
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