Subdividing IP in own name to HDT

Viewing 8 posts - 1 through 8 (of 8 total)

apapworth
Participant
@apapworth
Join Date: 2005
Post Count: 14
July 27, 2005 - 9:16 am
We are looking at Subdividing one of our investment properties that my wife and I own in our own name.
Since we have learned this isn’t the smartest structure to invest in, we would obviously like to have the subdivision and units that will be being built on that subdivision in a Hybrid Discretionary Trust.
Has anyone got any ideas on how this should be done?
Should we sell the land at a very low price so we dont get taxed on sale of the land and pay little stamp duty? or…
Should we sell the land at the market value for other reasons?…
Any ideas suggestions please…
cata
Participant
@cata
Join Date: 2005
Post Count: 559
August 1, 2005 - 6:01 am
You probably need to sell the property to the trust before the sub-division. Selling the land at a low price may be an option, but not to low or this might raise some questions with the ATO. Maybe a little under market value.
This is probably the best way, but more info would be helpful.
CATA
Asset Protection Specialist
[email protected]
apapworth
Participant
@apapworth
Join Date: 2005
Post Count: 14
August 1, 2005 - 6:28 am
Thanks CATA,
I imagine then selling the land at market would be better then, but then it would have to be subdivided first before it could buy it..?
AP
cata
Participant
@cata
Join Date: 2005
Post Count: 559
August 1, 2005 - 6:38 am
Could the trust sub-divide the land?
If you sub-divide it first then you pay two lots of stamp duty and CGT, If you sell it first then you pay only once.
CATA
Asset Protection Specialist
[email protected]
apapworth
Participant
@apapworth
Join Date: 2005
Post Count: 14
August 1, 2005 - 11:46 am
How this for an idea…?
The Trust purchased the units off the plan from us then no stamp duty would be payable… Any thoughts?
AP
lifeX
Member
@lifex
Join Date: 2004
Post Count: 651
August 1, 2005 - 12:00 pm
Why move this assett into a trust when you are likely going to increase your land tax bill by thousands! Watch out for Bracksy new 2006 rules.
http://businessnetwork.smh.com.au/articles/2005/07/21/2672.html
Live, Learn and Grow
Lifexperience
apapworth
Participant
@apapworth
Join Date: 2005
Post Count: 14
August 1, 2005 - 1:05 pm
Good point LifeX, but from what I understand this only effects property in VIC and our units are in Tassie. Please correct me if Im wrong…
I hope this doesnt happen though and surprises me as most of the ‘pollies’ hold their investments in the same structure. I hope and believe they will have to accept some of the exemptions/changes the REIV have suggested.
AP
lifeX
Member
@lifex
Join Date: 2004
Post Count: 651
August 1, 2005 - 1:19 pm
Just Vic….. for now. Although NSW recently copped a vendor tax reaming recently which is similar.
Having property in different States seems to be one of the last ways left to minimise Land Tax as you get the threshold limits in both states.
Live, Learn and Grow
Lifexperience