Trusts Set-up Steps & Issues

H

hwd007

Questions on trusts

1. How long does it take to set-up a trust ?

2. How much does it cost to set-up a trust ? ( i.e. before you use it to transfer propertires into ) The basic set-up costs

3. Who should I contact to set-up my trust ?

Dale do you do this as a service ?

I am about to buy another IP and want to get a trust structure in place so it can transfer straight into it.

Thanks,
David
 
Hi david,
I am in the process of setting up a trust for my IP. I was told every state is different hence there are different charges.

My solicitor was able to give me a completed trust deed in 5days.

In qld, it costs me $1100 to set up my hybrid trust. This charge goes to the solicitor/lawyer. So u need to consider what sort of trust do u want to set up.

Then you need to consider whether u r using a corporate trustee or a sole trustee. If corp then there are other cost to consider.

hope this helps
 
Thanks mate

I'm in Melbourne, but I'm buying IPs in Bris and melbourne and anywhere I can get a good deal. I'm wondering if Dales company sets up trusts for a service fee.
 
Hi David,

since u r buying interstate your trust would have to be stamped in every state that the property is in. In qld there is no stamping of the deed. Every state be different, so u will need to talk to solicitors in each state to comfirm.

glad i could be of some help.

I highly recommend to use Dale cos he's in Melb as well and he's very willing to answer all questions. Give him a tingle on this forum. I wish Dale is in brisbane !

Are you going corporate trustee ?

cheers
 
Hi David

Yes, my office does help establish trusts. You could use an accountant or your solicitor, but, I would recommend that you consult both anyway before doing anything just to ensure that you get the full picture.

It should take only a couple of days and the cost will vary depending upon who does and whether they include a company as trustee. Expect $2,000 to $3,000.

Dale

Originally posted by hwd007
Questions on trusts

1. How long does it take to set-up a trust ?

2. How much does it cost to set-up a trust ? ( i.e. before you use it to transfer propertires into ) The basic set-up costs

3. Who should I contact to set-up my trust ?

Dale do you do this as a service ?

I am about to buy another IP and want to get a trust structure in place so it can transfer straight into it.

Thanks,
David
Click to expand...
 
Thanks Dale. I expect I will be in contact with you at some stage. I'm not sure what would be best for my circumstances. Flexibility would be important I think. Probably descretionary trust ?

Bubble, I don't know what a corporate trustee is? I was thinking something simple yet very effective.

Surely the set-up costs would be deductible in some form, being a property investment trust ? I guess it's a legal / accounting expense ? Could it all be written off in 1 year ?
 
Hi

To the letter of the law, the set up costs should be claimed as a tax deduction over a five year period a little like borrowing costs.

However, we have always tried to help and so our invoiced have been written in a loose way to allow you to claim the full cost as a tax deduction in one year.

Dale
 
He He ! I was actually thinking about this in relation to another matter. Quite legal too I gather. Just charge in smaller amounts for different non identical tasks under $300 or similar type of thing ? I've been reading the ATO guide on rentals in relation to expenses.

Also in relation to depreciation with the low pooling method. Now if that blinds guy had only sold me those blinds for $999 instead of $1000 Damn.

I understand I could right them off faster using low pooling if they fall under $1000 ?


No having said that, I'm now wondering if I can seperate the labour component from the blinds cost component and write each item off seperately ? I mean the $1000 blinds included installation which is a labour component and not part of the cost of the blinds. Or does the ATO simply look at what you paid in total ?

Oh and also, can I claim electricity, gas and water ? with a trust IP that I'm renting from ? Probably not the former, but water is usually paid by the landlord and claimable aint it?

Dale ?

cheers.
 
Last edited:
Hi

No, the cost of the blinds and the installation costs cannot be broken down and then claimed separately.

Yes, the utility bills can be claimed in some circumstances.

Dale


Originally posted by hwd007
No having said that, I'm now wondering if I can seperate the labour component from the blinds cost component and write each item off seperately ? I mean the $1000 blinds included installation which is a labour component and not part of the cost of the blinds. Or does the ATO simply look at what you paid in total ?

Oh and also, can I claim electricity, gas and water ? with a trust IP that I'm renting from ? Probably not the former, but water is usually paid by the landlord and claimable aint it?

Dale ?

cheers.
Click to expand...
 
You mean tax evasion. As I understand avoidance is quite legal. It's like avoiding obstacles on an obstacle course, as opposed to bypassing the course all together and claiming you passed it with flying colors.

But I see your point ;-)

That said If I were charged with two separate invoices, perhaps it would be legal. Given that I could have installed the blinds myself and just paid the cost price of the blinds. Later then if I find them too difficult to install and solicit services for installation, surely that could be deemed a separate transaction.
 
minimisation could be seen as the resulting factor or consequence of aviodance or evasion and thus may be viewed as legal or illegal. ;-) But we are talking semantics.

Some may view seperate transactions to be quite legal. One for the provision of a good ( blinds ). The other for the provision of a service ( installation ).

These could be viewed as two distinct expenses, that could even be carried out by two seperate parties.
 
Last edited:
Hi

Actually, Kris, tax avoidance is perfectly legal and supported by our courts and legal system.

Tax evasion, however, is illegal and punished severely.

Dale

Originally posted by Kris Sheather
Minimisation is legal, avoidance is not, theres a fine line between pleasure and pain..
Click to expand...
 
hwd007,

So perhaps if you asked your tradie the best place to purchase what would be required to complete the job and then purchased it yourself you would have acheived quite legally the separation of the two costs. You could then pay the tradie to install them. There is no law that says you can't purchase materials and then pay tradies for their skills.

Guess it's how you go about it.

MF
 
Yes MF that sounds like a reasonable hypothesis to me. Thus if you can buy a capital item under the value of $1000 and then pay someone $200 for installation as an optional extra opposed to self installed and you are invoiced for two seperate transactions one bing a good and one bing a service, I don't see why you could not seperate them, as it seem to me at least, they are seperated in the first instance.

NOTE: we are assuming the item purchased is being used for income producing purposes, i.e the rental property, such as blinds, TV, dishwasher, stove, heater, under $1000 in value then perhaps we can use the low pooling method of depreciation at a 37.5% write off. i.e. or 2.666 financial years. As a Seperate transation or expense for installation under the value of $300, we could write off the full amount during the financial period in which the expense was incurred.

Otherwise if you paid $1200 for both good and service together the item seems to revert to a capital based deduction at the standard rates apllicable to the type of asset in question.

I assume all this would be quite legal, so long as at the outset the good and the service are sperated in implementation and transaction and accounting.
 
Last edited:
so under a trust, would you be required to lodge a seperate tax return specifically for the trust each year? and if so, in a hybrid discretionary trust, what income and expenses are we talking about, given that its my understanding that all these factors are taken up in the individuals personal tax return?

julie
 
You must log in or register to reply here.

Similar threads

see_change
How many Properties in a Trust in Q'land
Replies
15
Views
6K
see_change
see_change
C
Tax and trust set up for joint ventures
Replies
2
Views
1K
Terry_w
Terry_w
C
Gifting money into family trust
Replies
15
Views
12K
Terry_w
Terry_w
T
Minimising your Land Tax bill. This may work?
Replies
7
Views
2K
marty998
M
T
company trust
Replies
10
Views
3K
tj22
T
Back
Top