To buy in a trust or own name

[peppers01]

I have recently purchased off the plan and completed the the contract as and/or nominee, to buy some time to determine what the appropriate structure to buy in.

Can anyone tell me the pros and cons of puchasing in my name as opposed to in a trust?

Thanks

 

[ianvestor]

Someone will no doubt correct this if it's wrong, but I have a vague feeling that the "or nominee" trick only works for trusts that were set up prior to signing the contract. If a trust is set up after that date, then that trust is ineligible as the nominee.

Can someone tell me if I'm just making this stuff up? If so, I wonder why I dreamed it in the first place.

 

[mja]

peppers01 - do a search of the forum; there is *so* much discussion over trusts and personal names. Short answer - it depends. You should have a meeting with a property savvy accountant.

 

[skater]

peppers01 - do a search of the forum; there is *so* much discussion over trusts and personal names. Short answer - it depends. You should have a meeting with a property savvy accountant.

Before you go to the Accountant, make sure that you have all the expected incomes & expenses on the property worked out too. A property that is in a Discretionary Trust cannot neg gear, so keep that in mind. Also, for NSW at least, you pay Land Tax with no threshold too.

 

[Player]

I could be mistaken, however I was under the impression that as long as the entity exists prior to settlement (best if prior to going unconditional) then it should be OK. There is no double stamp duty impost (in VIC) by signing and/or nominee.

As Skater mentions, get your numbers in order first and foremost. If it's a neg geared scenario (likely) you will also have difficulty claiming the depreciation (so juicy with a brand spanking new OTP) in the trust.....those losses get trapped until the IP cashflows.

Get expert advice from your accountant and solicitor. If you are going down th trust road, I would have that deed set up and stamped ASAP.

 

[Pat]

Someone will no doubt correct this if it's wrong, but I have a vague feeling that the "or nominee" trick only works for trusts that were set up prior to signing the contract. If a trust is set up after that date, then that trust is ineligible as the nominee.

Can someone tell me if I'm just making this stuff up? If so, I wonder why I dreamed it in the first place.

Ianvestor, technically this is correct in Victoria, the trustee company and trust should be in existence. In practice there are many punters who have post contract dated Corporate Trustees but you could get caught on it and if so you will get it stuck in your own name. A good idea is to have a quality delivery agent working for your Conveyancer who delivers to the State Revenue Office the documents and knows which SRO worker to pass the docs to.

Never hurts to be a little street smart.

 

[Terryw]

I think it is probably the case in most states. How can you nominate someone that doesn't exist at the time of nomination.

 

[peppers01]

Thanks all, I do currently have a trust in place (set up prior to purchase), so should be no probs if I end up purchasing in that entity. The issue is around no being able to negative gear in the trust and any other things I am not aware of!

Anyhow, thanks all fr the feedback...much appreciated.

I think I am off to seek some advice from my accountant.

Cheers

 

[Ausprop]

and perhaps you should talk to a lawyer re asset protection

 

[boods99]

In WA at least, you are able to us the "and/or nominee" however you must state who the nominee is.
Also, you restrict your options in regards to finance as a lot of lenders dont like it...
Boods

 

[Terryw]

It shouldn't matter too much for finance - but the lender will want a copy of the completed transfer to make sure the name is the same on both transfer and loan documents. Sometimes lawyers are slow to produce these.