Can a child earn income on a property she doesnt own

[economist99]

Can my child earn income on a property she doesnt own?
I was about to transfer to her, and it was all ok but then became very complicated and I try to keep my life simple. It's possible to transfer to her but something I'd rather avoid.

SO, she received the rental income in her bank account, and I will always do tax returns for her for that rental income.

Question is: is this kosher?? Can she earn rental income when the property is in MY name? (the reason I'm doing this is to minimise my taxable income and keep it below certain thresholds)

 

[Mitch1]

To me, it doesn't sound kosher at all. How can she earn income from something she doesn't have any rights to?
The property is in your name so all income and expenses are in your name. Unless you transfer ownership to her or to a trust (both will trigger stamp duty and associated costs/legals etc) then it is your property.
I have limited experience in this but to the best of my knowledge, what you are suggesting cannot be done without transferring ownership.
A trust can be set up for this which can be kept relatively simple. You could distribute income via this to reduce tax to her taxable amount. However, you also need to remember that any other income she earns will reduce the amount you can transfer, even interest in a bank account which can catch a few people out.
Or you can transfer title to her name.
Stamp duty and legals will be an expense so you would need to take this into account and decide if it is worth it relative to tax you would save over time.
I do not know of other ways to do what you are suggesting.

 

[Paul@PFI]

Can my child earn income on a property she doesnt own?
I was about to transfer to her, and it was all ok but then became very complicated and I try to keep my life simple. It's possible to transfer to her but something I'd rather avoid.

SO, she received the rental income in her bank account, and I will always do tax returns for her for that rental income.

Question is: is this kosher?? Can she earn rental income when the property is in MY name? (the reason I'm doing this is to minimise my taxable income and keep it below certain thresholds)

Simple tax problem.

The answer is No. Without a shadow of doubt. It is your income and you have undeclared income. The act of minimising income is a avoidance scheme and liable to extra penalties for recklessness. 50% likely. + interest. Perhaps even 75%? . Also it means there is an unlimited time period the Commissioner can do this in (Its evasion). The Commr would be highly unlikely to amend her return at the same time...Double taxation could occur. The Commr may refuse amendments on the excuse its out of time and argue that the receipt to her bank accounts supports the fact it is income paid by YOU. (And deny you a deduction if you try to argue that)

You do realise that you have admitted to something and the ATO monitors this site ? ATO could issue a 264 notice and identify you as a result. You really should engage a tax adviser. Correcting these mistakes may result in no penalty if its corrected.

Perhaps if a trust held the property then the income could be hers as a beneficiary entitlement. This wouldn't give her asset ownership or control. There is a way. It triggers CGT but perhaps no stamp duty - Depends. Land tax a problem however.

 

[Terry_w]

Question is: is this kosher?? Can she earn rental income when the property is in MY name? (the reason I'm doing this is to minimise my taxable income and keep it below certain thresholds)

Could never be this simple or spouses would be earning income from their jobs but saying it was the lower tax payer spouse wh really earned it as the money was deposited iin his/her account.

There would also be serious legal issues to consider with your money going into daughter's accout - in addition to the tax issues