Anthony,

What legislation are you basing this on?

Consider s 14 LPA in NSW

http://www.austlii.edu.au/au/legis/nsw/consol_act/lpa2004179/s14.html

(1) A person must not engage in legal practice in this jurisdiction unless the person is an Australian legal practitioner.

    Maximum penalty: 200 penalty units.

and s4:

"engage in legal practice" includes practise law.

"Practice law" isn't defined but would likely include giving legal advice.

What is best for him probably won't be best for you.

Would you sell a option to him for a $1 for example? Have the property tied up for a long period without any benefit to yourself, other than $1. you could let him take an option over a shorter period and hope he finds a new buyer to sell to, but you could do this yourself.

You could sell it to him on an installment contract, but it may take you 30 years to get all your money.

And the legislation itself
http://www.austlii.edu.au/au/legis/cth/consol_act/itaa1997240/s118.145.html

Hi DaOne,

Sorry about the delay, I just found your email in my spam box.

Will call you tomorrow.

Terry

There is no tax advantage in doing this.

You lucky QLDers. NSW and Vic have both introduced stamp duty on put and call options, assessable on the transfer value.

What about stamp duty?

Anthony,

This thread is about trusts in general not SMSF.

I’ve often wondered what authority accountants/tax agents or financial planners have to legally advise on the set up of trusts and SMSFs, but have never looked into it.

I know that under the Corporations Regulations recognised accountants, such as CPAs, CAs, or NIA members are able to provide limited advice for SMSFs. I think this exemption only covers advice which would only cover what would otherwise be classed as financial advice. I don’t think this covers legal advice or legal services – which would probably be defined under the Legal Professional Act

But advising on non SMSF trusts is a different matter.

I recall mention of a WA case where an accountant got into trouble for providing legal services.

You obviously know much about SMSF law and Tax law, what is your take on this. What can lawyers do and not do, and what can accountants do and not do?

You might find LVR with a bank is much more limited than you expected. Maybe 60% LVR. Interest rate could be high too.

Why not try to fnd out what the vendor paid for it and when. This may enable you to estmiate what his mortgage is.He is likely to need cash enough to let him discharge the mortgage and the rest could be a loan to you – possibly.

It is not just the deed that is important, but how the trust is conducted is important.

eg. I had a client which was a company trustee of a discretionary trust. The trustee had been giving mum a distribution for years. But this was only a paper distribution with no money ever paid over. It was what they call a UPE, unpaid present entitlement. over the years mum was 'owed' about $200,000 by the trust.

Mum died. Guess what happened next – the executor of her estate was legally obliged to call in any money owing to mum. They asked the trust to hand over $200k. The director of the trustee was the son. He refused to believe there was a loan and he refused to play ball. The trustee was sued in the supreme court and the trust lost. The trust now has a judgment against it. Thousands of dollars have been lost in legal fees and now assets of the trust are about to be taken to satisfy the judgment debt.

This is just one example.

Another example is losing control of the trust. Look at the reinhart problems in the NSW Supreme Court. It is possible for a beneficiary to apply to the court to remove the trustee and appoint another trustee. Don't forget the trust assets do not belong to you or hte trustee, the assets belong to the whole of the beneficiaries of the trust. The trustee is just the legal owner for their benefit.