I am in NSW. I know absolutely nothing about trusts, anyone care to educate me or point me in the direction of some good info?
I've taken this from my accountants site.
http://www.chan-naylor.com.au/
What is the Property Investor Trust™ Deed?
The Property Investor Trust™ Deed is a hybrid trust deed modified with additional clauses to provide extra benefits to property investors.
What many people aren't aware of is that deeds are written differently by different solicitors. Not all trusts are the same. Even the same type of trust such as a Unit, Hybrid or Discretionary trust is written differently by different solicitors. These trusts have standard deeds that were not written specifically for property and what accountants and solicitors have done is to try and adapt it to property.
Whenever one tries to make something fit into something that it was not specifically built for, it invariably has some side effects. For example: Unit trusts, when used for property investing, create a capital gains tax issue where the cost base (value of the property at purchase) is reduced through depreciation, the net effect is you will pay more capital gains tax when you sell. Discretionary trusts are rarely recommended for properties because they not only lose the land tax threshold in NSW but they quarantine the losses inside the trust which means negative gearing benefits cannot be claimed by the individual. Hence, in each case there is a negative when these trusts are used for property. However, our Property Investors Trust™ Deed doesn't have these negatives. It has been tailor made for property and has none of the side effects that are associated with the other deeds. In fact, we do not use the Property Investor Trust™ Deed for other things such as businesses, because it was not built for it. We would use a discretionary, hybrid or unit trust for such a purpose as that is what they were designed for - businesses, shares, etc ... but not property.
In short, being specialist in this game we came up with the ideal structure that would provide the most flexibility, taking into account land tax for all states, capital gains tax and income tax. This is combined with asset protection and estate planning. The result is one of the most flexible trust structures for Australian property investors.
Remember this however, that actually establishing a trust is only 20% of the game. Most of the work is done at tax time so having an accountant who knows how the trust works is a vital part to using structures.
For quick reference and summary here are the benefits of the Property Investor Trust™ Deed:
Asset Protection.
Estate Planning (allows you to pass on property to your children with no CGT and stamp duty and protects them from their divorce).
Allows the negative gearing to be claimed by the individual.
Allows the Capital Gain to be distributed to the lower taxpayer.
Provides a land tax threshold. (Except VIC & NSW)
Allows you to minimize your tax position as the property changes from negative to positive gearing or vice versa and or if your circumstance changes (i.e. wife goes back to work or decides to stop working, without triggering CGT and stamp duty).
It is the only Trust specifically setup for property where all other Trusts were not setup specifically for property and each one has some shortcomings when adapted to property.
Allows anonymity with your assets held by a corporation as trustee.
