Residential tax deduction ?

Viewing 15 posts - 1 through 15 (of 15 total)

Most excellent
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@most-excellent
Join Date: 2003
Post Count: 100
August 21, 2003 - 11:03 pm
Hiya All !
If I was to set up a company trust, can I rent out my residential property for office space ?
Does the residential / investment property have to be commercial ?
kelly1100
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@kelly1100
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Post Count: 55
August 21, 2003 - 11:05 pm
Thats something you’d have to check with your local authorities I would imagine. When you say company trust….what exactly do you mean as a company is one thing and a trust is another.
Most excellent
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August 21, 2003 - 11:13 pm
A company trading under a family trust fund in VIC ?
Me[]
kelly1100
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@kelly1100
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August 21, 2003 - 11:20 pm
So your structure is Company as corporate trustee for the Family trust.
Or
Michael Family Trust trading as ABC PTY Ltd
Have you already set this structure up. I’m in QLD so maybe things are different up here….just about everything is “different” up here.
This isn’t answering your question, however, most of my clients are structured like this.
Company as corporate trustee for a Discretionary Trust and a Unit Trust. The Discretionary Trust owns the units in the Unit Trust. The Company never buys/sells/trades at all, it is only a trustee. Properties (shares whatever) are purchased in the Unit Trust. Profits from the unit trust are distributed to the discretionary trust which is turn distributes the profits out to beneficiaries.
Can you clarify your initial question a bit.
Most excellent
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August 21, 2003 - 11:28 pm
Hiya Kelly
The second one ( pty ltd ) Company is not buying/ selling or trading.
I’m looking to absolutely maximise taxable deductions.
kelly1100
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@kelly1100
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August 21, 2003 - 11:32 pm
So if your IP is owned in the trust and you want to rent it out to an unknown third party (arms length transaction) and your local authority allows you to do so…then I can’t see a problem.
Anyone else have some sage words of wisdom here???
Most excellent
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@most-excellent
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August 21, 2003 - 11:39 pm
Can I use my residential PRTY & rent it out to a trust fund with myself being the public officer ?
Or do I have to register my residential as an commercial PRTY in VIC ?
Open for pro’s & Con’s Please !!!
[]
Michael
Most excellent
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August 22, 2003 - 1:07 am
Is this an unanswerable topic ?
Can I rent an office anywhere I like ?
Are there any restriction ?
[] Any legal lope wholes or tricks will be taken under good advice.
Michael
Most excellent
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August 22, 2003 - 1:18 am
Have I overstepped the question parameters, if so I do regret the asking of the question.

Melanie
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August 22, 2003 - 1:20 am
I suggest a beancounter experienced in this area may be a better option, there are a lot of ‘depends’ in this one.
[]
Mel
kelly1100
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@kelly1100
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August 22, 2003 - 1:34 am
Sorry been doing someone’s tax returns – yipee.
If you own the property and then basically rent it back to yourself I can see you having problems with the ATO.
Years ago you could buy your PPR in a company or trust structure and then rent it back yourself, but the ATO have cracked down on that. I would imagine that you’d have the same problem trying to rent the property back yourself as an office. You would still be connected to the property via the Trust/Company.
I’m open for correction on this issue if there is another “beancounter” out there.
Most excellent
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@most-excellent
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August 22, 2003 - 1:36 am
Thank you
Mel
Some I’ve seen but they seem to put this one in the too hard basket.
I have zero fear in investing and would like to eliminate all the ‘depends’ and concentrate on the ‘wants’
[]
Michael
Terryw
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August 22, 2003 - 2:07 am
There is a tax ruling on a trustee or beneficiary of a unit trust renting a property owned by the trust. can’t find the reference at the moment.
If you are using it as an office, you could calim part of the expenses relating to that area used. It doesn’t have to be zoned commercial. It you were renting it out to a third party (eg Doctors surgery etc) , you may have to comply with council requirements.
Terryw
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Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
max1999
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August 22, 2003 - 2:18 am
Kelly1100
Great a chick that’s in the know… I recently posted the following question, do you think you could help me?
I’m Paulette from WA, really just a novice (at the moment) you certainly sound like you know a thing or two.
I am interested in wraps but I believe it is just a little to difficult for me at present. I was looking at the possibility of being a “mini” developer, ie; buying “the worst house on the best street” renovating & selling in quick succession…do you kmow the pitfalls in terms of capital gains tax…must I set up a pty ltd to minimise tax…. any help would be great!
cheers Paulette
trueblue
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@trueblue
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August 22, 2003 - 2:32 am
Hi Max1999
When you become a developer, your houses are treated as trading stock. You’ll have to pay tax on your profits. Makes no difference what entity you use as you eventually have to cough up.