Trust

[Tranquilo]

When I was doing my tax return last year and mention that we weren't stopping at one IP my accountant said we should start a Trust.
Now I don't know anything about them so is it best practice to start a Trust if buying more IP's.?
My accountant is an IP investor also so I have to (trust) him that he's knows what he's talking about.

Thanks

 

[Neils Bohr]

Accountants and Lawyers generally give advice that best suits them, not the client. I don't want to seem cynical but complicating the simplest of things earns Accountants and Lawyers more money. For sure, get a trust if you really need one. But be aware that most mum and dad investors on this forum do not use a Trust.

 

[Tranquilo]

Thanks Neils. Maybe I don't need then. He just made sound so good even tho I really don't know what he was saying lol. What interest me was he said buy your PPOR through the trust and rent it back claiming tax deductibility.

 

[Terry_w]

Why not start with my free book.

 

[Neils Bohr]

What interest me was he said buy your PPOR through the trust and rent it back claiming tax deductibility.

What a tangled web. First set up the trust, then deal with the bank and then the ATO. Plenty of hourly fees for your accountant.

 

[Terry_w]

Accountants and Lawyers generally give advice that best suits them, not the client. I don't want to seem cynical but complicating the simplest of things earns Accountants and Lawyers more money. For sure, get a trust if you really need one. But be aware that most mum and dad investors on this forum do not use a Trust.

Indeed - probably 90% of the people that come to me to set up a trust don't end up setting one up when we go through all the issues.

 

[Tranquilo]

Neils looks that way Terry thanks again I will

 

[Terry_w]

Thanks Neils. Maybe I don't need then. He just made sound so good even tho I really don't know what he was saying lol. What interest me was he said buy your PPOR through the trust and rent it back claiming tax deductibility.

But then it would be subject to CGT and land tax (most states) as well as the fact that you cannot claim any expenses but the trust would - it would need other income to offset this loss.

 

[Tranquilo]

Thanks Terry its been on my mind for weeks as I'm getting closer to buying my 2nd IP. I'll just concentrate on buying good for my 2nd