Hi,
I am after a trust where I will have all the benefits as if I was purchasing a IP in my own name,
My new accountant mentioned this as a feasible strategy..... basically he explained it as follows:
set up a Discretionary Family Trust
ie: The legal owner (in name only) - trustee
The assets (business or other assets, such as a home) - trust fund
The beneficiaries
The individual who hires / fires the trustee - appointer or guardian (can be yourself and your spouse)
The trustee can be you and your spouse, just you or your company
So you - Borrowing money in your own name from bank and then providing that loan amount to the trust is much the same as borrowing money to invest in shares which is used for investment purposes and can be used as negative gearing against your personal wages, ie same for borrowing investment property......
The bank can still hold your title for the investment property as security against the loan for the investment property - even though its owned by the trust (thus making it easier to get the bank to approve the loan)......
As your paying the bank back the loan in your name, the trust is making very little in the way of losses, (perhaps maintenance, rental management fees etc) but by and large you are reaping the bulk of the rent, (so no losses are quarantined in the trust).
Pull the rent out of the trust as it comes in - then use that to help with your loan repayments etc
- CGT is still the same at 50%
Is this correct, it sounds to good to be true, I fear setting this up and finding that i cannot claim neg gearing against my own wage?
Anyone able to clear this up for me???
I am after a trust where I will have all the benefits as if I was purchasing a IP in my own name,
My new accountant mentioned this as a feasible strategy..... basically he explained it as follows:
set up a Discretionary Family Trust
ie: The legal owner (in name only) - trustee
The assets (business or other assets, such as a home) - trust fund
The beneficiaries
The individual who hires / fires the trustee - appointer or guardian (can be yourself and your spouse)
The trustee can be you and your spouse, just you or your company
So you - Borrowing money in your own name from bank and then providing that loan amount to the trust is much the same as borrowing money to invest in shares which is used for investment purposes and can be used as negative gearing against your personal wages, ie same for borrowing investment property......
The bank can still hold your title for the investment property as security against the loan for the investment property - even though its owned by the trust (thus making it easier to get the bank to approve the loan)......
As your paying the bank back the loan in your name, the trust is making very little in the way of losses, (perhaps maintenance, rental management fees etc) but by and large you are reaping the bulk of the rent, (so no losses are quarantined in the trust).
Pull the rent out of the trust as it comes in - then use that to help with your loan repayments etc
- CGT is still the same at 50%
Is this correct, it sounds to good to be true, I fear setting this up and finding that i cannot claim neg gearing against my own wage?
Anyone able to clear this up for me???