Any income retained will be taxed at the top marginal rate in the hands of the trustee. The trustee should review the deed too to see if it is possible to retain income.

I’ve just set up a trust for someone with a child where he donated sperm and he doesn’t appear on the child’s birth certificate. He wanted the child to be a beneficiary and we did that by naming the child and also changed the definition of child to include artifically made children. This avoids confusion as there is legislation which means…[Read more]

At any point in time the beneficiaries of a trust must be known with certainty. There is no limit but it must be possible to say whether X is or isn’t a beneficiary.

A trust is not a separate entity but it is treated as such for tax reasons – like a partnership. A trust must lodge its own tax return

I am not sure what happens in practice. I am not an accountant and have never seen a beneficiary receive income of more than $416 pa.

In what circumstances would this arise?

Beneficiary is taxed. At marginal rates. But the trustee pays the tax because a minor is legally disabled.

http://www.austlii.edu.au/au/legis/cth/consol_act/itaa1936240/s98.html

Yes, you should get a private ruling.
What is the purpose of you capitalising interest this way? Only for a tax benefit in the future.

John, it is a bit late for this now if the contracts where signed last year.. There are a number of things that could have been done, but are probably too late now.

I suggest you just make sure that every expense that hasn’t otherwise been claimed is added up – incuding travel, light bulbs, lawn mower fuel etc etc and this can be used to reduce…[Read more]

You are assessed on your taxabe income. That is income minus expesnes. if you end up with $20k taxable income then no tax would be payable.

Yes, borrowing to park in an offset could mean none of the interest is or will be deductible.

I don’t know.
His loan is his business, but the lender could try to take possessio of the property and this could cause her to have to buy his share or to sell possibly. she should seek legal advice.

Generally refinancing a loan (not a mortgage) won’t affect the deductibility of interest. However if you borrow more money the interest on this will only be deductible if it is used for investment purposes or business purposes.

In most discretionary trusts no one beneficiary has any interest in the assets of the trust. So if a beneficiary were to be sued and end up bankrupt the assets of the trust are not property than can fall into the hands of creditors. An appointor of a trust may also be bankrupt yet the position of appointor is also not property that can be seized.…[Read more]

One person can consent to mortgaging their share of the property.

Consider post ddeath testamentary trust – s102AG ITAA36.

It would be good for asset protection and you may be able to divert income to children who could then be taxed at adult rates.

How did he do this? Is the mortgage registered on title?

An individual owner can mortgage their interest in the property, but it would be rare to find a lender willing to loan on this basis. It is possibly an unregistered equitable mortggage.

You will have to pay LMI if you borrow oer 80%, however there are some lender which waive LMI for certain professions at loans up to 90%, including refinancing.

These professions include:
Medical doctors
Pharmacists
Dentists
Vets
Accountants -CA or CPA qualified
Lawyers
Engineers
Quantity surveyors

Land tax will depend on where the properties are located, how long the lease is and your situation.

Seems straight forward to me.

What is it you are asking?

Property A could be exempt uder s118-145.

I don’t think any insurance covers this sort of thing, but I could be wrong.

You should do 2 things:
1) pay at the end,
2) get a personal guarantee from the architect.

If the architect company does down you will be an unsecured creditor. Same if the architect is an indvidual. No use in engaging a debt collector generally. If you received money back it would be a preference payment and subject to clawback by the liquidator…[Read more]