You need a request in triplicate to go to the bathroom...
Hehe, good one!
GSJ
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You need a request in triplicate to go to the bathroom...
David,
Have you read these threads and the PBRs? Why are you choosing to use a HDT? What are your circumstances? Why do you think a HDT is the only way to achieve the result you want? Have you sought the latest opinion from the person that set up your HDT?
Yes, I did get in touch with them within the last few weeks and was advised 'steady as she goes' and to go ahead with it until further notice.
Hi all. I thought I'd mention that I've been in touch again with those who I established the deed and am totally confident with my new HDT/IP purchase and that it's valid with the ATO.
If you are in doubt, I suggest you approach your accountant and solicitor.
One of the issues some people (and the ATO) seem to have with some HDT structures is that they are seen as having the primary purpose of avoiding tax. However the same people (and ATO) have no similar issue with normal discretionary trusts.
With a discretionary trust, any negative gearing losses are quarantined in the trust to be off-set against future income. With a Unit Trust/HDT structure, the negative gearing losses are immediately off-set against current income.
David, what exactly gives you this confidence? Has the ATO made a private ruling in favour of its terms? Or are the trust terms similar enough to a positive ruling that already exists?
Or are you confident because your trust deed provider is competent and confident that it will be valid? I note that just because a professional is competent doesn't mean a tax strategy will past muster with the ATO. Big firms get whacked on tax shelters all the time.
Alex
Did you or you advisors get something in writing from the ATO saying it is all OK, or is it verbal or from barristers?
Their silence suggests that it's a matter of 'we're not sure yet'.
Alex
This sounds promising.The answer to this is 'sort of'.
It's more than just this.
I'm really sorry guys but I don't feel comfortable or that it's appropriate for me personally to release the full details on this information.
What I can suggest is those with HDTs contact their accountants / solicitors for the latest updates.
If you don't have a HDT, you're not in the process of purchasing (as I am - 9 days till settlement on a 600k place!) and you just want to know out of interests sake, then I'd say just wait out until an official announcement is made from the appropriate people.
You all know who you can contact directly if you really really can't help yourself . I'm also well aware that if I just post they're response up here that will prevent them getting bombarded with contacts. Maybe that is whats required for them to make an announcement?
It's quite obvious this is a sensitive issue for some and I don't want to get in the middle of it. I hope you understand my situation.
I am using a HDT mainly for asset protection, tax planning and flexibility.
This property is seriously negatively geared so I couldn't see other trust structures working for me. The only other option I considered was owning it in my own name as I'm on a high income.
David Mc
If you owned the property 1% in your name and 99% in your spouses and used the rental property salary sacrifice concept discussed on www.bantacs.com.au you would have asset protection on 99% of the property and 100% deduction for the cash flow expenses of the property with only 1% of the income. And this concept has an ATO ruling and test case on 50% ownership. There is a kit to get your own ruling on 1% ownership. Should not be a problem as the relevant word in the legislation is "jointly" not equally so no way the ATO can argue it has to be 50%.
Tax wise this should give you a better result than a HDT
Julia
If you owned the property 1% in your name and 99% in your spouses and used the rental property salary sacrifice concept discussed on www.bantacs.com.au you would have asset protection on 99% of the property and 100% deduction for the cash flow expenses of the property with only 1% of the income. And this concept has an ATO ruling and test case on 50% ownership. There is a kit to get your own ruling on 1% ownership. Should not be a problem as the relevant word in the legislation is "jointly" not equally so no way the ATO can argue it has to be 50%.
Tax wise this should give you a better result than a HDT
Julia
Doesn't work well if you're both high income earners and high litigation risk, or if your employer won't agree to it, or you keep changing employers...
GSJ
May not work for us then !Doesn't work well if you're both high income earners and high litigation risk
GSJ
Tax wise this should give you a better result than a HDT
Julia