Accounting for a Trust

[geoffw]

Hi,

I'm just about to settle on my first property set up under a family trust (after reading Dale's "Tax Battles").

But I'm not sure about what I have to do about keeping the accounting separate.

It was bought using only borrowed funds. But I've already had to contribute for pre-purchase expenses. And the first bank payment will come in a few days before the first rent arrives.

The trust was set up OK, but I don't have a clue as to what I have to do about accounting for the money I contribute, the money that the trust contributes, and what comes out of the trust again.

Is there a website which would explain this in nice four letter worsd?

 

[DaleGG]

Hi Geoff

Originally posted by geoffw
Hi,

I'm just about to settle on my first property set up under a family trust (after reading Dale's "Tax Battles").

But I'm not sure about what I have to do about keeping the accounting separate.

It was bought using only borrowed funds. But I've already had to contribute for pre-purchase expenses. And the first bank payment will come in a few days before the first rent arrives.

The trust was set up OK, but I don't have a clue as to what I have to do about accounting for the money I contribute, the money that the trust contributes, and what comes out of the trust again.

Is there a website which would explain this in nice four letter worsd?

I'm afraid that there is very little information ut there at all on trusts and how to use them. For what it is worth . . . I am in the process of preparing my mind to write a book on what to do once your trust is born. All I have to do now is find the time to put it all together so don't hold your breath too long.

The trust should have separate accounting records to your own personal records.

So, the trust will record all money in ( including loans from you ) and all money going out which will include the loan repayments and the bank establishment costs etc as well the normal expenses of owning an IP.

Does this help a little?

Effectively, you are acting as a bank to the trust in the short term and with any luck, the trust will repay your kindness soon.

Have fun

Dale

 

[geoffw]

Thanks Dale.

You mention "loans from me". Does that mean that anything I have contributed to the property so far, is a loan to the trust, to be repaid in due course?

Geoff