Trusts and CGT

[Jacque]

From: J Parker


Yawn.. What a boring topic!
But,hopefully someone with experience can answer my question, regardless!

I am aware that the rules involving CGT and trusts may have changed in recent times. Can someone tell me is CGT taxed at the same rate in a trust situation as personal ownership? For eg:

If I buy and sell company owned property (co. as trustee) within a year am I liable for CGT at the marginal tax rate or at company rate? If company, then what are the current rates?

Cheers, Jacque

 

[see_change]

Reply: 1
From: See Change


Jacques

as you know I'm not an accountant , but my understanding is that CGT is taxed at the marginal rate of the beneficiary it is distributed to. If the beneficiary is a company it will be at the company rate.

If the beneficiary is an individual, then the Capital Gain is added to the individuals income for that year and taxed accordingly. If the property ( or shares) have been held for more than one year , you will get the 50% discount applicable.

Profits can't be held within the trust , but once it has been distributed it can either be loaned or gifted back to the trust

see change

it's better to be guided by your dreams than your fears

 

[DaleGG]

Reply: 1.1
From: Dale Gatherum-Goss


G'day!

SC is right. One of the beautiful benefits of a trust is that YOU choose what rate of tax you will pay on a Capital Gain as opposed to the Tax Office choosing what rate you will pay when the gain is made by an individual or a company.

You've gotta like that!

Dale

 

[Owen]

Reply: 1.1.1
From: Owen .


Do you have to have all the beneficiaries in place before making the capital gain?

i.e If you want to distribute to a company, have the company set up before selling the asset otherwise it can't be included during distribution of the profit.

Owen

"Gambling promises the poor what property performs for the rich – something for nothing"

 

[DaleGG]

Reply: 1.1.1.1
From: Dale Gatherum-Goss


Hi Owen

No. The Capital Gain could be made on July 7 of a financial year for example, and the company beneficiary could be established on June 28 of the same financial year. The only important issue is that company conform to the definitions required within the trust deed and that the trustee has distributed the profit (including Capital Gain) on or before June 30.

Cheers

Dale

 

[Owen]

Reply: 1.1.1.1.1
From: Owen .


Excellent. Thanks Dale.


Owen

"Gambling promises the poor what property performs for the rich – something for nothing"