Holding PPOR in a family trust

From: Always Learning


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Would anyone recommend purchasing and holding their PPOR as within a family trust? Quite possible that PPOR being considered (approx 900K) in will in several more years then be rented out when owner returns to home (Melbourne).
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Property being considered has a non-attached granny-flat with separate entrance which could be very suitable to be re-labeled as a home office/business office. If so, is it reasonable for the family trust bill the high income earner for use of such an office and distribute income to family trust members?
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Would anyone offer suggestions about best method to structure such a purchase.
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Sim

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Reply: 1
From: Sim' Hampel


On 4/15/02 10:09:00 AM, Always Learning wrote:
>
>Would anyone recommend
>purchasing and holding their
>PPOR as within a family trust?

Considering that the primary purpose of using a trust is for asset protection, surely if you were concerned with protecting your assets then that would suggest holding your PPOR in a family trust ?

The tax issues need to be weighed up, but depending on your attitude towards asset protection, these may not be quite as important.

 
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W

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Reply: 1.1
From: Steve Piggott


Seeing we're following the US in a litigation frenzy.... trusts are great for asset protection, particularly if you have a corporate trustee.
You should be aware that this must be your primary reason, especially if you intend to lease the property back to live in yourself.
The ATO looks at 'intent' and you will need a RAP (reasonably arguable position)to satisfy the ATO if you are queried on this.
Many investors are opting for this strategy also noting that there are also many tax benefits in investment property.... apart from the CGT concession if onsold.
Be wary... the ATO looks for patterns in investment strategies to determine whether we are structuring for asset protection or tax evasion. I dont need to tell you that the ATO assumes guilt then asks for proof of innocence.
As always seek expert advice from those qualified to give it. Good advice is worth it!
Happy investing.... Neb :)
 
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Reply: 1.1.1
From: Dale Gatherum-Goss


Hi Steve

The RAP only determines the level of penalties involved and not whether you should, or should not, be doing something.

Otherwise, great idea and well worth noting the continued presence of our friends.

Have fun

Dale
 
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