Hi B

That alert is specifically about unit trusts, and it doesn't look like the ATO favours them!

There are other alerts, IDs and tax rulings and private rulings on various hybrid trusts on the ATO site. They don't like them if the trustee has discretion on who to give income to. e.g. you can't just get the spouse with the highest income to claim the loss for buying the units if they are not guaranteed all or most of the income from the trust.

Hi C2

What makes you think negative gearing is evil? I had a negative geared property increase in value by $600,000 in just a few years. Doesn't sound evil to me!

try this too
http://www.bmtqs.com.au/construction_cost_calculator.htm

M,

Has your trust any assets yet? Maybe you can just add the appointor. If a resettlement occurs, it won't matter too much as there are no assets. But you maybe up for the initial stamp duty again. If it is unstamped, you could probably just add it in before taking it for stamping.

Yes, there would be a problem as who would appoint the trustee. I haven't heard of a discretionary trust without one and I don't know if it would be possible unless maybe the trustee was fixed at settlement.

Points
– Different trusts sometimes use different terminology, maybe the appointor is called something else.
– Unit trusts don't have an appointor, are you sure it is discretionary
– If there is no appointor, what happens if you want to change trustee?
– What happens if the trustee dies?

It is unusual to own a property in a company alone, unless it is acting as trustee. Johann – is the company a trustee?

If so, the tax treatment will be totally different, the gain will be distributed to the beneficiaries and they may be entitled to the 50% discount if they are individuals – so you should pay a max of 24% tax and probably a lot less.

You can chose which property to count as your main residence with the CGT exemption – if you have lived in both.

The second mortgage is similar to the first (the one by the bank), it is just that the first takes priority.

You will need to get your solicitor to draw up the mortgage document and the loan agreement for your dad – or actually his solicitor should.

The first mortgagee, the bank, will need to give permission to allow the second mortgage, and they will need to factor in your repayments to your dad when they work out serviceability.

If they are going bankrupt, then be careful. Under the claw back provisions of the Bankruptcy act they can claim back the sale or maybe chase you for a shortfall if you buy a property under market value.

Hi

I think you need some professional help – from a tax expert. Maybe try http://www.gatherumgoss.com in Melbourne.

There are potentially many ways you could go such as:
– sell one property per financial year, reducing tax
– borrow the equity in retirement without selling
– transferring ownership of your business to a discretionary trust
– sell business, keep properties (small business tax concessions)
– etc

The way you go may depend on how it is set up now, your incomes and how much you actually need each year.