IP Development - from my name to my/wife's name

[pasey25]

Hi All,

I'm in the very early stages of looking to develop an IP that I have to dual occ or knockdown/rebuild units.

The property is in my name, which works OK as it is currently NG and I am in a much higher tax bracket to the wife.

My goals for the development are to move to CF+ and hold or at worst sell for profit.

Accordingly, can I use the development like a JV to 'build' the wife's equity (i.e. via her funding) so that we maximise our tax position should we get it to CF+ or sell for profit?


presume the answer is yes, just curious about how this may happen (yes I will be speaking to an accountant but want to be armed with info first)

cheers,

Pasey

 

[Brady]

Confirming which state the property is in should assist. Assuming VIC?

 

[Paul@PFI]

STOP. Then breathe.

You made a mistake putting land in your name. Its done. You dont want to double the stamp duty now do you? Maybe in Vic so less an issue but still may be an issue form a trading stock way of thinking ? Loan security v's interest deductible borrowings ?? Its probably less an issue than you think.

What is important now is using the right structure to develop. A seperate entity should build and make a profit selling the completed construct to the land owner. Minimise the profit impact on you the land owner..That entity can make a profit and split it / share it etc !!! eg A disc trust, company trustee or perhaps a company. Even a unit trust. It all depends. Personal advice definately needed. Thjis problem is one of the most common I see from many on SS....The above solution generally can fix it. Has to be tailored to suit the specifics.

Importance of getting good advice is easily seen here. Importance on now getting advice even clearer.

 

[pasey25]

Thanks Paul, exactly what I expected.

I've held the property for about 10 years, enjoying great CG and a small amount of deductability while it was an IP for the last 5 years or so. It was my PPOR beforehand.

Whats done is done. It was definitely logical at the time since I wasn't married!

Good to hear there are some structures that can address my situations. Will seek advice accordingly.

btw I am indeed in VIC, How might this change things?