Just wondering if someone can help me.
I am purchasing an investment property under a discretionary trust. I am a trustee and beneficiary of the trust.
I seem to be getting some conflicting info regarding the name that needs to appear on the title…. should it just be under my name or my name, as trustee for XXXXX ??
I am taking out a loan for the purchase and am standing as the guarantor.
Thanks
Not sure if this helps but I have a family trust solely in my name. My accountant had me put mine as: xxxx (trust name) as trustee for the xxx (my last name) Family Trust
Thanks for the reply…. thats what i thought it should be.
I 'assumed' that the name on the title would be ("my name", as trustee for "trust name"). However my conveyancer says that it is ok just to put my name down on the land title… with no reference to the trust at all.
If this is the case, and assuming that in future I want to buy another property under my name only, how does the tax office know which is under the trust and which is under my name ?
There are also multiple beneficieries of the trust, of which I am one of them.
Does anyone else have any experience in this?
Hi andlim
I have discretionary trust setup under a company trustee, and have always put down on all paperwork as the purchaser; xxxx (trustee name) as trustee for the xxx ( trust name) Family Trust.
e.g. Acme Pty Ltd as Trustee for the Smith Family Trust.
If in doubt, check with you solicitor however I would ensure the conveyancer correctly and 'fully' notes it as;- xxxx (trustee name) as trustee for the xxx ( trust name) Family Trust.
Hope this helps.
cheers
JasonThanks for the advise Jason.
Yes. My accountant was very pushy about getting this across to me. I purchased my first IP under my own name and 7 years later he's still annoyed at me. As I understand it, it MUST be purchased in the correct name.
Just be careful. In NSw a few years ago if the name on the contract was XYZ as trustee for ABC trust, the Office of State Revenue wanted double stamp duty.
With a trust it is the trustee who is the legal title. The trust is not a separate legal entity and its name cannot go on title. It is just the full name or names of the trustee.
eg If your trust is the Smith Family Trust with Simthy Pty Ltd as trustee, then the title needs to be in the name of Smithy Pty Ltd.
If the trust is Smith Family Trust and Richard Smith and Nancy Smith are the trustees, then the title needs to be in the names Richard Smith and Nancy Smith.
Also, you should never be signing a contract without checking and running it through your lawyer first. If you get it wrong it could be very costly – like paying stamp duty a second time.
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
Hi Terryw,
I also currently have another property that is solely under my name… does this mean that it will also be part of the trust ? (as there does not seem to be any distinction between between purchasing under my own name or under the trust)
Eg Current place of residence is purchased under Richard Smith
Investment property purchased under the family trust is also purchased under Richard Smith. How do we then differentiate which property is purchased under the trust and which is not ?Just seems to be a bit confusing to me.
Also, if I am correct a trustee can be removed by the appointer / guardian of the trust…. what happens if for some reason down the road the trustee is 'fired' and all the properties are still purchased uder their name ?
Thanks
There is actually a huge different between buying in your own name and your name as trustee – it is just not reflected in the title deed. So if you did a search on someone you would not know if they held the property as trustee initially.
If the trustee were to change the new trustee's name must replace the old one on all legal documents and titles etc. if land was owned you would have to change the title at the land titles office – usually nominal stamp duty, like $100 or so, and they will want proof that it is owned as a trustee and the trust is still the same – if the trust changes, like adding a beneficiary, then they could deem the old trust as being replaced by the new and stamp duty payable again, + CGT, so you need to be careful.
You would also need to discharge and reapply for the loan again, new mortgage docs, guarantors etc.
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
Terryw wrote:With a trust it is the trustee who is the legal title. The trust is not a separate legal entity and its name cannot go on title. It is just the full name or names of the trustee.eg If your trust is the Smith Family Trust with Simthy Pty Ltd as trustee, then the title needs to be in the name of Smithy Pty Ltd.
If the trust is Smith Family Trust and Richard Smith and Nancy Smith are the trustees, then the title needs to be in the names Richard Smith and Nancy Smith.
Also, you should never be signing a contract without checking and running it through your lawyer first. If you get it wrong it could be very costly – like paying stamp duty a second time.
Terry is correct, however in Queensland the Trust can be (& probably should be) registered with the Dept of Natural Resources (QLD Titles Office) and can then also be noted on the Title, the Trustees will remain as the registered proprietors
It is also a good idea for the trustee to lodge a caveat on title too so help id the property as trust property
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
thanks for clarifying
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