Funding the HDT when it makes a loss

[NickD]

Hi All,

I have a HDT with Corp as Trustee. I have recently purchased a property that is due to settle in the next few weeks

Now this is my first IP in the new Trust...The IP will be slightly -ve geared, which means that rents received by the Trust bank account will be less than required by me as Unit holder to pay for IO loan. That part is ok!

Trust Magic talks about all the goodies the Trust can purchase with Pre Tax dollars. From what I can understand this is all good when the Trust makes a profit.

So I want the Trust to buy a printer for example; do I loan the money to the Trust and then the Trust makes the purchase out of its account, and I keep doing this every time I wish to buy something? (Business related of course). Obviously keeping track with minute entries etc.?

Thanks.
Nick

 

[Twitch]

So I want the Trust to buy a printer for example; do I loan the money to the Trust and then the Trust makes the purchase out of its account, and I keep doing this every time I wish to buy something? (Business related of course). Obviously keeping track with minute entries etc.?

Thanks.
Nick

FYI, printers can be salary packaged with pre-tax dollars FBT free, and then claimed via depreciation on personal income. This makes them almost free, depending on your tax bracket.

 

[Mry]

FYI, printers can be salary packaged with pre-tax dollars FBT free, and then claimed via depreciation on personal income. This makes them almost free, depending on your tax bracket.

Unless the printer came with a laptop, you couldn't salary package it.

Here is a nice list of things you can salary package that are FBT exempt.
http://www.ato.gov.au/taxprofessionals/content.asp?doc=/content/21740.htm&page=29&H29

If you wanted to salary package a printer, I would buy a laptop with a printer as a package and then return or sell off the laptop.

 

[Terryw]

Nick

are you sure it will be -ve? If you are paying the interest personally, then the trust may be making a profit. Interest is the major expense usually.

Terryw

 

[NickD]

Terry,

I suppose you are right...the trust doesn't have to pay the interest; I do as the loan is in my name! I was thinking logistics here...Account receives rent which gets taken out by me every so often to pay for the loan, shortfall is topped up by 221D. I just hadn't grasped whether the Trust should pay for all IP related expences and I throw in money where required as a loan to the Trust, to be paid back at some stage?

Cheers,
Nick