HI Everyone,
Just wondering if I quit my job and live on equity (drawing against value of properties) I wont really have any taxable income except rent. Assuming the interest repayments exceed the rent is there any point in me bothering with depreciation claims and other expense claims on my tax return, (given that it wont increase any money back from ATO)??
Also along those lines if thats my plan is there any point in me setting up a HDT for future purchases??
Any comments / thoughts appreciated.
Thanks
GrantWhat! quit your job?
There is still a point in claiming things, even if you have a loss as the losses can be carried forward.
If you set up a trust, you won’t be saving tax, but you will be protecting your assets, and the trust may also assist in reducing CGT down the track if you happen to sell when you have income. It adds flexibility.
Trusts can carry forward losses too.
Terryw
Discover Home Loans
Parramatta
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Thanks Terry,
Dont worry my wifes got list of jobs to keep me busy for a decade or so…
I sort of thought carrying forward losses might justify it so I’ll keep claiming. But at the moment I only have a discretionary trust.
Given my plans would u think it worthwhile setting up a HDT??
Could I use a HDT now but have it work like a ‘normal’ trust, but then sort of switch it easily to a HDT if things change later on?
Is there a lot of extra work tax time with HDTs?Sort of a side issue I read on one accountants web site that HDT were a ‘grey’ thing with the ATO, and should not be used!!
Has any one had any problems with ATO & thier HDTs??Thanks
GrantI think having a HDT is very good. As you say it can run as a normal discretionary trust until needed. There should be nothing extra at tax time until it starts issuing units.
Which website did you read about HDTs being a grey area? Recently Lawcentral have been promoting them, and http://www.bantacs.com.au have given them the thumbs up too, they did have some reservations before.
But as more and more people start to use them, it could get the ATO interested in looking at them closely. So just make sure you set up correctly with a good accountant.
(I have seen clients come to me with big problems, including loans in the wrong names for properties in the HDTs)
Terryw
Discover Home Loans
Parramatta
[email protected]
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Just send me a blank email, with “subscribe†in subject line.Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
The only people who think HDT’s are “grey” are the onerwho know little or nothing about them IMOP. They have there pros and cons, but still are a great structure
CATA
Asset Protection Specialist
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