Hi All,
I read on the Australian on Thursday that the ATO will be targeting family trusts if they decide the purpose of it is to minimise tax liability.
My husband and I are in the process of buying an IP and were going to set up a trust. Should we bother now??
I know a lot of people in the forum have family trusts, any thoughts??
LeoHi Leo
You don’t need a trust if you are only ever going to purchase 1 or 2 IPs or if you are only setting it up to minimise tax.
We have a trust currently with 3 properties in it and soon to have some shares in it and of course more property. It was set up for 2 reasons one to keep our investing totally seperate from ourselves which really links into number two that is to protect our investments from any action of or by others.
So trusts are good you just have to consider why you wanted to set one up.
Cheers
Leigh K[
]Carve your own path and lead the way.
Hi Leo,
I agree with Leigh.
We have a trust and I think it will always be more beneficial to have one, than not to have one.
All the politicians, and big wigs at the ATO have trusts, so I don’t think they will target them too much. It’s a bit like negative gearing I think – scare tactics.
BTW – I would say that all trusts are set up for tax minimization.
Good luck,
Del
>>BTW – I would say that all trusts are set up for tax minimization.<<
Trusts are set up for a multitude of reasons, tax minimisation may be a mere side effect of having a trust.
Your statement that tax minimisation is the primary motif of setting up a trust will make you a prime prospect for an ATO investigation Del [
]Watch your words.
Pisces
Pisces,
Of course I mean others…
We set up our trusts, for asset protection only.[]I love paying tax! [:o)]
Del
I asked my accountant ages ago about doing this, and he said not to bother. I asked my solicitor and he said ask my accountant!
Given I have a few things on the boil, I really feel a trust is a way of protecting, but also having a structure where you can bring others in and distribute the funds in such a way as to benefit everyone.
Mind you I am looking to change accountants, so I will wait until i have done that to change my structure.
On another issue though, while discussing my will (and the need to deal with property via a trust to be set up (grandkids benefit) I Was told to have the executor do that AFTER obviously my death. not that Im looking to cark it! I’m too far off my 50th! and I want a party this time.
does anyone really have the right answers?
Elves
Thanks all for your feedback! I think we will end up setting one up after all, for asset protection of course![
]
The other thing is that my accountant said that with a trust I will be liable for land tax. I would not be liable if I bought on my own name!
You can never win!
cheers,
LeoElves, if you own any assets in your own name, that will for various reasons not be transferred to a trust while you are alive, I suggest that you set up a ‘testamentary trust’ which is executed within your will.
The best reason for this is that if there are any kids that are beneficiaries (under 18) they will be taxed on any income as an adult. ie the $6K tax free threshold will apply. If they receive income from assets left directly to them, rather than through a testamentary trust, they will pay the kid rate of tax ie $400ish free, then taxed at 66% or something like that.
Cheers
Mel
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