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Originally posted by h8dk97
Could I setup a family trust if I am working F/T (a permanent employee) and then distribute the profit between the beneficiaries? And would it actually make sense for me to do it.
Thanks in advance.
Originally posted by DaleGG
HI Jerry
Yes, you can establish a trust whilst working full time. The trust can distribute income to any of the beneficiaries however, the trust cannot earn your income for you . . . if that is where you are heading.
Have fun and good luck
Dale
Originally posted by geoffw
To add to Dale's comment...
As well as that flexibility, I can isolate claims on my property to the property in the trust. If a tenant sues me big time, I can lose the property in the trust- but my house is protected.
Originally posted by Macca
Geoff,
may I ask what was your actual total set up costs for your trust were and what you expect your annual compliance and running cost to be. Also, what "type" of trust did you set up.
I have read estimates of cost but was wondering about actual costs.
Originally posted by Jude H
I thought the whole point of setting up a trust was so that if you are sued they can't touch your property in the trust as you don't own it. Can they sue a trust?
Originally posted by h8dk97
Does that mean that I will still have to pay the same tax as I am paying now (I'm in the highest tax bracket)?
Originally posted by paulzag
I'm not Geoff but I'll give you my setup costs.
Actually you'd be worse off. Trusts and corporate structures are for people running businesses and investments. They are not an effective way of earning your pay packet as a PAYG employee.
Regards Paul Zag
Originally posted by h8dk97
Could you please expend a little bit on that, why exactly would I be worse off, because of the overheads involved or any other reasons? And could trust rent a property to its beneficiary(s)?
Originally posted by Jas
I'm not Paul, but...
You'd be worse off as the trust must distribute the income. All that goes to you would still be taxed at your personal rate. Also, you'd have overheads in running the trust itself, and unless you had a hybrid trust, you would be unable to negative gear (something high income earners look at).
The trust could rent the property to its beneficiaries, however this must be at market rates. This comes under the 'at arms length' the ATO likes to see.
If you are thinking of selling your PPOR to the trust, you'd have stamp duty issues, and you would lose out on CGT should you sell from the trust at a later date.
Jas
Originally posted by Roz
Does this mean it is better not to have your PPOR in a trust?