Hi guys,
I am looking at a muilti-unit development site and going to use a family trust to settle it and this will be my second development project. The family trust has a PTY as the trustee and beneficiary. The reason to use trust is I need to get a commercial loan and trust can distribute the income to the company to hold for as long as I like and then the company can pay dividends to the lower incomer earner to minimize the tax.
I will be able to build 5 units on this site and might have to presale 1 to 2 units to get commercial construction loan. I understand I will have to pay GST and income tax for those 1 or 2 units without 50% CGT concession for those pre-sale units because I will not have hold them for more than 1 year.
Now the question is about the rest of the units from my development I am going to keep. How do I need to setup the business structure so that the trust will still get 50% CGT concession if I decide to sell them down the track after holding them for at least one year?
I have a full time job in IT industry, not a so-called "developer". The difficulty from what I can see is how to convince ATO that the purpose of the development is for long term investment rather than short term profit targeting although I will have to presale 1 to 2 units to get the loan.
I am looking at a muilti-unit development site and going to use a family trust to settle it and this will be my second development project. The family trust has a PTY as the trustee and beneficiary. The reason to use trust is I need to get a commercial loan and trust can distribute the income to the company to hold for as long as I like and then the company can pay dividends to the lower incomer earner to minimize the tax.
I will be able to build 5 units on this site and might have to presale 1 to 2 units to get commercial construction loan. I understand I will have to pay GST and income tax for those 1 or 2 units without 50% CGT concession for those pre-sale units because I will not have hold them for more than 1 year.
Now the question is about the rest of the units from my development I am going to keep. How do I need to setup the business structure so that the trust will still get 50% CGT concession if I decide to sell them down the track after holding them for at least one year?
I have a full time job in IT industry, not a so-called "developer". The difficulty from what I can see is how to convince ATO that the purpose of the development is for long term investment rather than short term profit targeting although I will have to presale 1 to 2 units to get the loan.