family home held in trust or compamy

Viewing 7 posts - 1 through 7 (of 7 total)

dragonlady
Member
@dragonlady
Join Date: 2004
Post Count: 8
April 29, 2004 - 4:46 am
Hi everyone, I am new to this forum. I wonder if anyone can give me some idea about what sort of tax treatment for the family house which is held by a family trust or a company structure ? Will the menbers of the trust or the shareholder of the company have to pay rent to the trust or the company ? Many thanks !
Terryw
Participant
@terryw
Join Date: 2001
Post Count: 16,213
April 29, 2004 - 5:36 am
Yep. There is a tax ruling out there (somewhere??) on a family home being held via a trust. For tax purposes it cannot be classed as your main residence and will therefore be liable for CGT and land tax. You would also be required to pay market rent to the trust/company which in turn may have to pay tax on this.
If it is your tempory main residence it may be worthwile – you could negative gear it for a period and then move on and buy your final main residence in personal names and retain the existing one in the trust structure- reaping tax and other benefits.
Terryw
Discover Home Loans
North Sydney
[email protected]
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email Me
Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
dragonlady
Member
@dragonlady
Join Date: 2004
Post Count: 8
April 30, 2004 - 1:36 am
Hi Terryw,
Thanks so much for sharing your knowledge on this topic. Really appreciate your help. This forum is great Thanks again.
Dragonlady
Aceyducey
Participant
@aceyducey
Join Date: 2003
Post Count: 651
April 30, 2004 - 3:20 am
We do this.
We pay market rate rent to the Trust & it’s NOT our PPOR
Cheers,
Aceyducey
Bid
Participant
@bid
Join Date: 2004
Post Count: 18
April 30, 2004 - 10:41 am

In regards to to your comments –

“If it is your tempory main residence it may be worthwile – you could negative gear it for a period and then move on and buy your final main residence in personal names and retain the existing one in the trust structure- reaping tax and other benefits.”

If someone claims FHOG on the property, is there a requirement how long the property has to be held as a residence before converting it to IP?
Regards
Bid
Terryw
Participant
@terryw
Join Date: 2001
Post Count: 16,213
April 30, 2004 - 11:39 am
Bid, you can’t get the FHOG if purchased via a trust.
for individuals, I think there is no requirement to live in the property for a minimum set period, the legislation states you must live in it at some stage during the first 12 months.
Terryw
Discover Home Loans
North Sydney
[email protected]
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email Me
Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
melbear
Member
@melbear
Join Date: 2003
Post Count: 2,429
May 4, 2004 - 12:41 pm
Re the FHOG.
I thought the rules had been changed so that you now had to reside for 6 months in the home?
Cheers
Mel