Move asset from trust to person
- Thread starter hello1234
- Start date
Depends on the state where the property is located and terms of the trust.
Discharge mortgage, transfer, reborrow and remortgage.
Costs
legal advice, tax advice, conveyancing, stamp duty, CGT, mortgage discharge, loan exit, loan entry, mortgage.
There may or may not be stamp duty exemptions. I dont' think there are any CGT exemptions.
Why do you want to do this?
Last edited by a moderator:
Why didn't the unit holder just borrow to buy the units?
Last edited by a moderator:
There is a way to do this without trigger of any stamp duty in some states. CGT yes. The process is a well known but poorly understood scheme based on common law.
The complexities of doing this whilst mortgaged require pre-approval, refinance etc.
The review of how to refinance based on tax rules would be first step. Its possible that using a different entity as unitholder may allow refinance and no change of the Trustee owning the prop. Land tax rules need to be considered for this. However the present sole UH may end up with a CGT issue when they dispose of their units.
Personal tax advice on strategies, land tax, deductions, CGT and GST even (commercial IP) may be a first step before taking legal advice.
The complexities of doing this whilst mortgaged require pre-approval, refinance etc.
The review of how to refinance based on tax rules would be first step. Its possible that using a different entity as unitholder may allow refinance and no change of the Trustee owning the prop. Land tax rules need to be considered for this. However the present sole UH may end up with a CGT issue when they dispose of their units.
Personal tax advice on strategies, land tax, deductions, CGT and GST even (commercial IP) may be a first step before taking legal advice.
Because many banks are not willing to accept the structure whereby the title is in the corporate trustee's name while the loan is in the unit holder's name.
There are many banks that will. I have just done a loan for a client.
Last edited by a moderator:
I only know CBA does. Any tips/hints on the others?
Most of the other major banks will. St G, ANZ. Maybe more. I should add if the property is already owned it is too late as the units are already acquired. You would need to borrow to acquire the units to get the ability to claim the interest. Selling the units to a spouse may enable the spouse to borrow to buy them.
Last edited by a moderator:
I only know CBA does. Any tips/hints on the others?
A broker earns their $ by assisting with issues like this. That said they are usually paid by the lender NOT the borrower so failing to use a broker makes little sense.
I have NEVER met a client who didn't get a better deal through a broker. The worst possible outcome is they confirm that the bank offer is the best available and there is still no cost ?
Last edited by a moderator:
Selling the units to a spouse would also be a dutiable transfer in many instances. A far smarter approach is to issue new units to spouse and to then redeem portion for the exiting UH. This is the crux of the refinance principle. OSR accept that issue of new trust units is not dutiable. Redemption is not dutiable. What is dutiable is a transfer. Property or trust units (valued at market value of the transfer). In QLD however a issue / redemption is also dutiable...the one state with an indirect stamp duties rule.
Many issues affect such a strategy. Where is property, loan structure, lender, loan security available etc Also unrealised CGT cost has to factor into calcs. Redemption or transfer of units is a CGT event.
