Buying 99% in Wife's name

Hello,
A quote from API mag 06/08 has me wondering if I should be buying 100% in my own name or 99% in my wife's name (she has no income).

After discussing Hybrid Trusts the author quotes a respected accountant saying that there are other methods for achieving -ve gearing and streaming of income to the low-income earner.....To quote "Owning a property 99% in the name of the low-income earner and 1% in the name of the high-income, high-risk spouse. The high-income earner can effectively claim 100% of the expenses through salary-sacrificing (no fringe benefits tax because they are 'otherwise deductible') but the low income earner gets 99% of the rent and capital gain."

Yet my accountant tells me to buy in my own name as the high income earner.
I would appreciate thoughts on this matter from those who have done either way. Thx.
JB

After discussing Hybrid Trusts the author quotes a respected accountant saying that there are other methods for achieving -ve gearing and streaming of income to the low-income earner.....To quote "Owning a property 99% in the name of the low-income earner and 1% in the name of the high-income, high-risk spouse. The high-income earner can effectively claim 100% of the expenses through salary-sacrificing (no fringe benefits tax because they are 'otherwise deductible') but the low income earner gets 99% of the rent and capital gain."

Click to expand...

Sounds dodgy, but I'm no accountant. I would have thought that income, expenses etc would have to be proportioned according to % ownership?

How old was this article? it hasnt been done away with the new FBT changes Ruddy has brought in has it?

Hiya

I believe that has been canned in the reecent budget ?

ta
rolf

Does that mean hold out on buying the book until there is a reprint?

Strategy now dead. Our clients who had entered into this strategy had a unit trust at the top level so all units have been redeemed and transferred to the high income earner. Those comfortable with a hybrid trust have had special income units issued and refinancing has occurred.

Pity those who purchased the property as tenants in common with a discretionary trust and no unit trust at the top level as your losses will be trapped after the next FBT year.

Belu said:

How old was this article? it hasnt been done away with the new FBT changes Ruddy has brought in has it?

Click to expand...

It's in the latest API mag.

Thx everyone for your input. Much appreciated.
JB

Yes it is in the latest API mag it went to print the weekend before the budget!!!***. Anyway there is more detail on the API web site, that was just a short comment the full arguement is on the web site which we have been able to update for the budget.

Re the book that trick was only a small part of it. Plenty of other good stuff and it comes with a correction. 15 years and they change the law the month the book is printed!!!!!