Trust
- Thread starter Freeman
- Start date
You can't transfer equity. You can either
1. loan money to the trustee (if it is not yourself)
2. settle money on the trust (ie gift).
Neither are tax deductible. If you lend money to the trust and charge interest you may be able to claim any interest you incur - and this will be income to the trust - if the rates are commercial.
Thanks Terry for prompt reply. Yes I mean lend money to Trust. How do you define commercial rates? Do i charge interest to Trust with bank rates?
Sorry am not sure if how things work in TRUST.
Basically just want to understand which is beneficial to us ..
You would need to charge the trust at least what you are paying in interest, if not more. You should have a written loan agreement which would hold up in court.
However when you say 'friends' this may mean you have a unit trust. You should seek tax advice before getting legal advice as you may be subscribing to buy units.
If you don't have a unit trust set up then seek legal advice asap.
However when you say 'friends' this may mean you have a unit trust. You should seek tax advice before getting legal advice as you may be subscribing to buy units.
If you don't have a unit trust set up then seek legal advice asap.
Terry,
The OP said "set up a trust account".
This just suggests a joint venture (which itself could amount to a partnership at general law or tax law etc. but that is another issue without given facts) where an account is merely an operating account with requirements to trace individual contributions and benefits.
Or the term "trust account" could have been used in a way not understood by the OP.
Can't really generalise with so few facts.
I took it to mean set up a formal trust under a deed, but could be wrong. Many use the phrase in this way.
Op can you elaborate please?
it's a Trust Deed where we set up trust account for IP purpose.
Discretionary
Well there are issues there because it is discretionary. Whoever controls the trustee position will control the distribution of income and capital (subject to the deed).
Hi all, thanks for your info.
So as a Trust, what are the best way to utilized the Trust? From my understanding, we can claim 100% of our spending in the name of Trust. However if the Trust is not making money, we have to top up using our own cash and anything negative can be rolled over till we sell the property or when it's positive. How can we minimized rolling over? We can offset to our income tax? Your advice is greatly appreciated.
So as a Trust, what are the best way to utilized the Trust? From my understanding, we can claim 100% of our spending in the name of Trust. However if the Trust is not making money, we have to top up using our own cash and anything negative can be rolled over till we sell the property or when it's positive. How can we minimized rolling over? We can offset to our income tax? Your advice is greatly appreciated.
Thats a new one to me! The normal tax rules apply to trusts too.
You can't claim anything in relation to the trust but the trust itself may be able to claim certain expenses if they relate to producing assessable income.
