Best solution for family IP

I am hoping someone can help me with some advise on the best way to set up a property.

My father has an investment property in his name. There is no loan on the property and is currently rented out. It was purchased prior to 1983 so I believe it is exempt from CGT if he sells the property.

We would like to keep it in the family and want to transfer to property into either my sisters name, my name or both our names.

Although, we are unsure what is the best way to do this so that it is set up to be as tax effective for us in the future.

My sister and I both have home loans for our own homes at the moment and were wondering if we purchased the property from my father and got a loan for the property so that we could negatively gear the property, whether this was allowed.

Then my father could give us the money to pay off our current house home loans. Is there any issues with this?

The other thing that I need assistance with is what is the best way to set up the property, should we transfer the property in a family trust or a hybrid trust?

Please help me with your thoughts because I have been unable to get any valuable feedback from anyone to date.

Thanks for your help in advance.
 
Then my father could give us the money to pay off our current house home loans. Is there any issues with this?



Whats the motivation behind wanting to move it out of your fathers name? Is it a Centrelink thing? Gifting amounts of money away has issues for pension if it is that..
 
Is there any issues with this?
Yes!!! For all of you. :(

I think your fathers interest will be best served with a visit to a good accountant or (hate to say it) a good pay-by-the-hour financial planner for some advice.

Perhaps you could state where your father is based to obtain some recommendations? :)
 
It is very difficult to find a good accountant/financial planner so any recommendations would be greatly appreciated.

Most suitable location would be around Essendon. I am happy to travel further to get good advice.

Thanks for your help.
 
Hi btproperty
there are several good accountants interested in property investing who contribute to this forum. I won't list them since I might miss someone!
Have a search through and see what other forum members think.
Your father could also contact a Centrelink Financial Services Officer as a start. They can be quite helpful.

Terry
 
I agree with Terry. Sounds like its time for advice from an accountant, rather than randoms like me on the internet :)
 
Then my father could give us the money to pay off our current house home loans. Is there any issues with this?

I am no Centrelink expert, but yes.

If he makes a gift over and above the $10,000 (I think that's it) that he is allowed to give as a gift each year, it will permanently reduce his pension with no future adjustment that can be made as the entire amount of the gift is considered an asset. Last I checked anyway.

I've looked at this before and there is no best fit solution. The best you can get away with to minimise the impact on your father is for him to lend you the money and gift away the maximum possible each year. Instead of permanently adding a gift amount over the maximum to his pension adjustment, this adds a similar one that can reduce over time.

Call up the pension people and run by them three scenarios -
1 - Your father makes a gift of the entire amount.
2 - Your father loans the amount to you interest free and gifts away some of the loan balance up the maximum each year.
3 - Your father keeps the money.

See which scenario would work out the best for you. And I am no Centrelink expert so I disclaim responsibility for this advice. This is not an area I work in at all.
 
G'day btproperty,
Most suitable location would be around Essendon. I am happy to travel further to get good advice.
I don't know Melbourne - but I know DaleGG (his office is in Kilsyth). I also don't know if he can be of assistance with your specific questions. But he has never failed to deliver for me in the area of property investment. So perhaps contact him and ask. http://www.gatherumgoss.com/ Even if he were unable to assist directly, I am sure he would be able to guide your steps toward someone more suitable if required,

Regards,
 
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