I have a 50% share in an investment property in my family trust worth $1.5m approx. My share $750k, my share of debt is $310k – so net equity $440k approx. My home loan is $347k, trust does nothing but hold this asset
Question – Can Trust asset be sold to me personally at market value and proceeds from sale then distributed and applied to the home loan debt? What is the CGT and costs of doing this transaction? Is this allowed and whether its a smart business decision?
Any advice appreciated
When you say a 50% share, do you mean there are units issued? Or are you talking generally? because beneficiaries cannot have shares in a discretionray trust – otherwise it would not be discretionary.
If the trust is a unit trust this opens up a range of opportunites for you.
Family trust owns 50% of an IP with another entity, pretty sure my trust is not a "unit trust", best i re check the doco. Cheers Terry.
Correct – So am i wrong to pay CGT, Stamp duty, break loan fees etc just to have the property in my name and no home loan mortgage? Obliviously, if i then go on to sell it again, later in life then i am having to pay these fees all over again.
Purpose is to pay of home loan, increase cash flow as i won't have a mortgage to pay and receive tax benefits from IP which will be under my own name and not family trust. The other party is another family trust entity. The only disadvantage i see is that i will be forced to pay two lots of stamp duty – 1 now to have the property sold from Trust to me personally and then again later in life if i decide to sell it again.