When to use a trust, and when to use your own name

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echelon6
Member
@echelon6
Join Date: 2009
Post Count: 19
March 18, 2010 - 12:47 am
Hi
I'm just trying to work out the general advantages of a trust over buyiing in one's own name.
So am I correct to say that as I build my portfolio, I should put the negatively geared / capital growth ones under my own name (I plan to have a long career so my PAYG tax would climb), and put the positively geared +CF IP's in a trust?
Or can IPs in a trust offset my personal income as well?
Also, can IPs in a trust make use of my currently unused FHOG?
Terryw
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@terryw
Join Date: 2001
Post Count: 16,213
March 19, 2010 - 12:59 pm
Just remember negative geared properties will one day make a profit. So buying in your own name now may save some tax, but long term…..
Trusts are separate entities for tax, so any losses cannot be used to offset your personal income.
FHOG cannot be used for properties purchased in a trust.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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@evolve
Join Date: 2009
Post Count: 66
March 21, 2010 - 8:38 am
Have you thought about using an SMSF?
If structured correctly you can get the best of both worlds i.e. lower tax when you sell plus lower tax all the way through – regardless of whether it is positive or negatively 'geared'.
Want to know more? If so let me know.
Cheers
E
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