Transferring a personal property to the trust

I am interested in moving the property that I’m living in, into my Hybrid Trust. I acknowledge that a similar topic was covered some time back, but my scenario is a little different and the questions are different.

First of all, I’ll describe my scenario.

I started a hybrid trust at the end of 2003 because I bought an investment property and wanted to negative gear it while still having the property in the trust. This means that the Trust made X number of units available (value of the house + expenses) and I bought the units by taking out a loan from the bank.

I don’t know if this will effect the outlook on the questions that I’m asking, but I also wanted to say that I’m the trustee of the trust, so all property deeds have my name on them. A little down the track I do want to make a company the trustee, but I believe that can’t do this at the moment and I’ll address this and other related questions in another posting on the forum.

I currently live in another house (that I used to rent out a while back) that I’m paying off (it’s in both my and my wife’s name), however over the next couple of years I will move to a bigger house and will make it a rental property as well.

The positives and the negatives that I see in moving the house to the trust are as follows:

Positives
Interest on the loan is tax deductable. That’s about $7000 for each $100K that you have borrowed.
Any repairs are tax deductable.
All changes/additions depreciate. The place needs a new Kitchen.
If the property is positively geared, the profits go to anyone in the family you want and are not linked to the loan.

Negatives
You have to pay stamp duty when you move the property to the trust. About 10K for a $300K property. (Tax deductable)
You’ll pay land tax every year. (Tax deductable)
You’ll have to pay CGT if you sell. (I don’t believe in selling property, so shouldn’t be an issue)

From the above, to me it does make sense to move the property into the trust, but I’m interested in finding out of any other arguments that I might have missed for the case against, just in case I’ve left something important out.

Here are my questions:

1) I guess that I will have to pay stamp duty when I move the house, but is there a way of just giving the house to the trust?

2) The house the I’m living in now I used to rent out until 15 months ago when I moved in with my wife. Before that it was a rental property for 7 years. Will we be required to pay CBT on the 7 years that it was being rented?

3) When (if) I move the house to the trust I wanted to rent it back at the current rent level, but I’m not sure if you can do this in a hybrid trust. I guess there are two scenarios in the hybrid trust that need to be considered for leasing the house back from the trust.
a) Trust has sold units on the property. This is similar to a unit trust scenario. The trust makes available X number of units that my house is worth and I buy them from the trust. The question is: Can the Trust rent out a property to it’s beneficiary, also the person on the deed and who in addition owns units in that property?
b) Trust has the bank loan for the property. This is a more traditional family trust scenario. The question is: Can the Trust rent out a property to it’s beneficiary, also the person on the deed and who in addition would be getting the profit from the trust?

I think I saw somewhere a tax ruling that I think says (these things are sometimes hard to read because of the legal jargon) that you can’t rent a property that is owned by a unit trust and for which you own the units. This is very similar to the question 3a that I have, in that I own the units for my property that I’m living in and claiming the negative gearing from my income. But I’m looking for another opinion in layman terms. []

In question 3b, the trust has the loan and not me, so the situation is slightly different and I think it might be possible in this situation.

I guess this is a long and involved question with many parts, but help with any of the parts would be greatly appreciated.

Kind Regards,

Orion
[8D]