Hello all,
Let’s say I was inheriting a property and as a beneficiary it was coming to me me with a lease and a significant amount of rental income.
I already have a great job and this income is going to be taxed heavily, where my Spouse is not working.
Moving the asset to a trust is not really an option due to the triggering of CGT and Stamp Duty.Is it possible to create a property management pty ltd company that leases the property from me for $1?
Then I can use that company to lease the property to the tenants and distribute the income via dividends through an existing DT that would own the company shares?Cheers and thank you for your input.
Short answer is ‘no’, Well you could do it, but no tax advantage.
But you should seek legal advice asap as there may be some strategies available before the estate is finalised – avoid CGT and stamp duty possibly.
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
Thank you Terry for your reply.
To understand a little clearer, you said “Short answer is ‘no’, Well you could do it, but no tax advantage.”
Do you mean that you can do it as long as there is no tax advantage, or you can do it but there is no tax advantage?Thank you Terry for your reply.
To understand a little clearer, you said “Short answer is ‘no’, Well you could do it, but no tax advantage.”Do you mean that you can do it as long as there is no tax advantage, or you can do it but there is no tax advantage?You can do it if you like, however the ATO isn’t silly and can see when things are a scheme primarily setup to reduce tax and will then deny the tax deductions for it.
This usually gets brought up when people come up with ideas to try reduce their tax with these kinds of setups: https://www.ato.gov.au/General/Gen/Part-IVA–the-general-anti-avoidance-rule-for-income-tax/
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
Thank you Terry for your reply.
To understand a little clearer, you said “Short answer is ‘no’, Well you could do it, but no tax advantage.”Do you mean that you can do it as long as there is no tax advantage, or you can do it but there is no tax advantage?You can borrow to do as you propose but the interest won’t be deductible.
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
Thank you Terry for your reply.To understand a little clearer, you said “Short answer is ‘no’, Well you could do it, but no tax advantage.”Do you mean that you can do it as long as there is no tax advantage, or you can do it but there is no tax advantage?
You can do it if you like, however the ATO isn’t silly and can see when things are a scheme primarily setup to reduce tax and will then deny the tax deductions for it.
This usually gets brought up when people come up with ideas to try reduce their tax with these kinds of setups: https://www.ato.gov.au/General/Gen/Part-IVA–the-general-anti-avoidance-rule-for-income-tax/Hi Corey
Actually with something like this Part IVA wouldn’t be applied because it would fail deductibility under s 8-1 ITAA97.
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
Thank you Terry for your reply.To understand a little clearer, you said “Short answer is ‘no’, Well you could do it, but no tax advantage.”Do you mean that you can do it as long as there is no tax advantage, or you can do it but there is no tax advantage?
You can do it if you like, however the ATO isn’t silly and can see when things are a scheme primarily setup to reduce tax and will then deny the tax deductions for it.This usually gets brought up when people come up with ideas to try reduce their tax with these kinds of setups: https://www.ato.gov.au/General/Gen/Part-IVA–the-general-anti-avoidance-rule-for-income-tax/
Hi Corey
Actually with something like this Part IVA wouldn’t be applied because it would fail deductibility under s 8-1 ITAA97.Good pick up – you’re right there. :)
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
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