Hi, I am new to the forum and would like to congratulate you all on the useful info and discussions being posted.
We have just moved into our IP after an extensive reno. We bought the house through a discretionary trust we have. I know the ATO still hasn’t closed the loophole for us to do this. Does anyone have any comments on what we can and cannot claim and other advice relating to this whole issue?
It is importantthat you have a bank account opened in the name of the trust. Make sure you pay all your rents into that account. Similarly, all expenses are to be paid from that account.
As far as I am aware, you are entitled to claim all the normal expenses relating to a rental property ir interests, rates & taxes, insurance, repairs.
Hi.
Since you have a trust, the trustee should buy a copy of ‘Trust Magic’, by Dale Gatherum-Goss; available from http://www.gatherumgoss.com. This book has been recommended by a number of property investors.
You can definitely rent your PPOR from the trust, and thus should have a number of legitimate tax claims, e.g. depreciation of furniture etcTerry
FinanceHi mh,
Do you have a PPOR, or is this going to be your “PPOR” so to speak?
There are significant implications depending on your answer. Let me know and I will fill you in.
APIM
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Australian Property SoftwareComing very very soon…
*************Is it possible to buy a PPOR in a trust structure and gain the same tax advantages (CGT exemption), as i always thought a PPOR had to be bought in your own name?
I agree with Terry and would invest in Dale’s “Tust Magc” book – i’m halfway through it and it’s got a lot of good info in it.
Further on renting from your own trust. There are several reasons to do so, eg you move into a former investment property, or you might have some cashflow advantages (depends on your situation I guess).
You might also be doing it for asset protection. I work in a high litigation risk field, and although I own my home outright in my own name, I have a contrived debt to my family trust that exceeds the value of my home.
The house is therefore unencumbered, which allows me to take out a mortgage if I wish, but the trust has a floating charge over my assets, which I could settle on the house at the drop of a hat before a judgement creditor could take action.
If I were sued, the trust therefore is a secured creditor and gets to take my house, rather than some money grubbing ambulance chaser (no offence intended[
]).I still retain the CGT exemption on my home, since it’s in my name.
(PS I would also avoid paying stamp duty on the Mortgage if I were in the states that charge that).
Remember: these are only ideas, talk to your accountant and solicitor to see if this works for you.
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