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  • Profile photo of aaron.r604aaron.r604
    Participant
    @aaron-r604
    Join Date: 2024
    Post Count: 0

    Hi all, I have a question regarding renting a property from my trust.

    If I have a fixed unit trust and it owns a property, can my company then rent the property as an office?

    Trustee (Company) directors: me and my partner

    Company (PTY LTD) director: me

    If this is allowed, is there anything in particular I should be aware of such as formal rental agreement or market rate rent?

     

    Thanks in advanced

     

    Aaron

    Profile photo of Steve McKnightSteve McKnight
    Keymaster
    @stevemcknight
    Join Date: 2001
    Post Count: 1,763

    Hello Aaron,

    I don’t see why not, provided it is on an arm’s length basis.

    For instance, Z Company P/L can rent from X Unit Trust, notwithstanding they are separate but related entities.

    That said, it would be wise for you to speak to your accountant / lawyer about this to ensure the terms are appropriate.

    Good luck!

    – Steve

    Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
    https://www.propertyinvesting.com

    Success comes from doing things differently

    Profile photo of aaron.r604aaron.r604
    Participant
    @aaron-r604
    Join Date: 2024
    Post Count: 0

    Much appreciated Steve.  Will definitely consult with an accountant beforehand.

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213

    The trustee would need an express power in the trust deed to rent to a beneficiary.

    But if the trustee as the same company you are referred to? There is a common law rule against contracting with yourself, even in different capacities. but the ATO seems to allow it for tax purposes. Best to seek legal advice

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

Viewing 4 posts - 1 through 4 (of 4 total)

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