Folks!
I'm about to purchase a CF- property with a trust. I obviously want to retain the tax benefits and have been advised that I should apply for finance as myself (Applicant 1) and the trust (Applicant 2). The income (net rental) would then be distributed to me from the trust, and the gearing benefits would apply to me as an individual.
Does this sound right?Much appreciated.
Mark
Hi Mark,
If you want to distribute -ve gearing benefits a Hybrid Trust is the best way to go, from what I understand. If you have a good accountant take his/her advice, if not then get one.
Regards
AlistairIf you are using a HDT structure that is not quiet right.
The property will be in the name of the Trust although the loan in your name.
You will then borrow the funds to purchase units within the Trust.The interest deductions, depreciation etc etc will flow through to you as the unit holder.
In saying all of this make sure your Accountant is upto date on the ATO queries concerning HDT's as most Accountants aren't.
A badly worded Trust Deed will have you in deep water.Richard Taylor | Australia's leading private lender
Qlds007 wrote:A badly worded Trust Deed will have you in deep water.Exactly Richard. It's something that is easily overlooked unless you understand what you are reading.
Be very careful with doing this now. The ATO has recently disallowed the individual claiming the interest with a hybrid trust as (it appears) the wording of the deed used was not sufficient to justify the individual claiming the interest. Look at this, and keep in mind it is a private ruling,:
http://www.ato.gov.au/rba/content.asp?doc=/rba/content/28993.htmTerryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
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