Trusts are considered separate entities for tax purposes. So any loss resulting from income will be carried forward but cannot be used to offset anyone else's income.If a trust sells a property and makes a capital gain then this is different class of income from the income loss which is carried forward. But, the trust deed may permit the…[Read more]

You should note that site is for Tax Professionals. If you are using one you should probably be OK. Even if you are penalised it won't be much and you can ring them up and ask them to drop the penalty and they probably will.If you are seriously ill then ask the ATO to wipe your tax debt – there is a good chance they will wipe it completely.

Yes the 6 year rule can aplly after you move in and then out again.So if you live in year 1 and then move out in year 2 then it could be CGT free from up to 6 years.But if you rent it out for 1 year and then move in for 1 year and out again and rent it then the first 1 year will mean CGT applies but it could be exempt from the subsequent absence…[Read more]

Not neccessarily as it was technically due back in Oct

You cannot just decide to pay the CGT in a different financial year. You must pay it in the year the contract was entered into. So if you signed contracts in july 2010 the tax would be part of the financial year of 2010/2011 which would be due about now.

You can only get hte main residence exemption once you have established in as your main residence and this probably means moving in.If you rent it out first hten it would be subject to CGT based on the time it was a rental. So if you rent 1 year out of 10 then 10% of the gain would be subject to CGT – but you would get the 50% CGT discount on this

Don't assume finance will be ok as it depends on more than equity. At least approach a broker beforehand. You wouldn't want to waste all your time and energy and costs of checks only to find out there is no chance.Then get a copy of the contract. See if there is anythin unusual in it. You could start some verbal negotiations and then see a…[Read more]

That would fall into the taxable income year of 2010-2011. Tax returns were due to be lodged by around Oct last year, but I think this is extended to Feb or march this year if you are using a tax agent to lodge. Once the tax return is lodged then the ATO processes it and sends you a letter of assessment and then you will have x days to pay. maybe…[Read more]

natashawicks wrote:
Terryw: do you need to live in it for a year to get that 6 years CGT free?

No. The property just has to be your main residence and then you move out. The rule relates to being absent from your main residence.

What about doing both?Buy PPOR, move in. move out and rent it while you rent elsewhere with flatmates.You can have the property CGT free for up to 6 years and continue to claim all the usual tax deductions.

I still don't see how it differs. Remember this scenario is based on an offset account attached to an investment property.Say the IP has a taxable loss of $5,200.If he has $50k in the offset then this will save $3,200 pa in interest. So the tax situation for this property will become $2,000 lossThis effectively means his income overall has…[Read more]

HI dachopperI am not sure I completely understand you post. Assuming interest rate on offset and on savings are exactly the same, I still cannot see how it would differ if interest is calculated daily and added monthly to the savings account/off the loan interest.I was failing to take into account taxation on savings, but this would generally only…[Read more]

Its just a commercial decision. Bank would probably sell at market value and make a claim for any shortfall on LMI. LMI will lose out as they couldn't pursue the vendor or previous owner as he is bankrupt. This is what they charge their huge fees for.

Sounds like you need some legal advice! Or you could lose out.

Would you rather earn $100 in interest or save $100 in interests on the home loan?Both would result in the same savings – assuming the same entity is involved.The $100 interest would be taxable. The $100 in interest saved would mean  you have $100 less in deductions which means your taxable income will increase by $100.

MVUnless you are earning 7%+ in the savings account it would probably work out better for you to put money in the offset as you will be earning whatever the loan interest rate is.Also, If you have a spouse on a lower income then it may work out better to lend it to them and they earn interest in a savings account.

A trust is not a legal entity. So the names on contracts should be that of the trustee. But the ATO treats a trust as an entity for tax purposes so it could be X as trustee for Y.For insurance it doesn't really matter I think, but you should inform the company that the trustee is acting as trustee – full disclosure. Not sure it would make any…[Read more]

I guess that would be the case if you are buying a new house – the architect fees would be built into the construction price. And that is how i claimed one actually as part of the cost of constuction.

AALLII wrote:
Can someone please explain the difference between having a company setup to be the trustee of a trust as opposed to having myself as the trustee of a trust which will be used for purpose of subdivision and land development. Thanks

AlliiHuge difference.Companies have the benefit of limited liability so will help protect you and…[Read more]

AalliiIn some cases yes.