Discussion in 'Legal Issues' started by Terry_w, 3rd Jan, 2014.
I am very interested in the book!! Happy to provide comments and feedback!
Hi Paul, a few quick questions on the above:
If the unitholders are two disc trusts with corporate trustees, can the directors of each corp trustee (who are also sole beneficiaries of each DT) claim the interest against their distributions (from the unit trust to their DTs then to them as beneficiaries)?
Or will the loss have to be retained into each of the DTs?
Trustee borrows trustee claims.
I doubt the directors are also sole beneficiaries, otherwise the trusts would not be discretionary!
1) starting funds for a unit trust... what basis / criteria would you use to determine whether to lend the trust money vs simply purchasing units
2) once the project done within a unit trust is complete, the property is revalued higher and equity is released, can these released funds be simply on-loaned to trust2 to start new a project? Or what would other options be in terms of buying back units, redeeming units or otherwise to repeat Point 1) again with new project/property in new trust.
Ok the Trustee Co Pty Ltd would have the loan in its name and claim any deductions related to the borrowing expenses of buying the units.
So considering this loan is used to buy units in a UT (and not a property) - how does one set up the loan structure so that at settlement the UT ends up with the property title and the Trustee Co (ATF DT holding units) with a loan for the units.
Is it just a matter of placing the loan in the Trustee Co name (ATF DT) and title in UT or is this a different type of loan?
If any of the finance gurus / brokers are willing to shed some light it will be much appreciated by many readers of these boards.
not sure why you would want a the discretionary trust to take the loan but...
The property would be in the name of the trustee company of the unit trust while the trustee company of the discretionary trust would take the loan from the bank. From the bank's point of view they will simply see this as title in name A with loan in name B.
The trustee of the discretionary trust would subscribe to buy units which would happen at settlement - all simulataneous.
1 - where you would want the deductions to fall
2. yes can be lent by the trustee if the trust deed allows.
What if both trusts share a trustee?
there would be no trust
Thanks Terry. Thought it makes sense since the trustee co atf DT holds the Units. Would you suggest that the loan be held by individuals instead (i.e. Directors of DT trustee co)? Or are you alluding to changing the structure (dt owning units in ut).
Thought lots of people did that, one pty ltd, serving as trustee for multiple trusts...?
a company can be a trustee of multiple trusts, but a person cannot hold assets on trust for themselves or there would be no trust.
If the individuals did the borrowing the interest wouldn't be deductible.
Yep, wasnt talking about personal trustees at all.
Now that thats cleared up, if a company is trustee of 2 trust deeds that both allow lending out & borrowing in, can trust1 lend money to trust2?
a company is a legal person.
Yes trusts can lend to each other.
I'd be interested in the finance part of it, especially with trusts, companies, personal monies etc. Income & Expenditures, Lines Of Credit, accessing Equity from any of a variety of entities (personal names, trusts etc) and ensuring everything is kept tickety-boo for the tax man
Well finally Version 1.0 is done. Thanks for those who provided feedback and comments. Hope that it helps many who have questions and it certainly doesn't cover everything. Sure there will be many future versions to come.
Can be downloaded from the home page www.propertytaxsolutions.com.au
And I should point out that this is a work in progress. We will be updating the book as we go along.
Thankyou both very much. I have downloaded it and will sit and study it tonight.
Really appreciate the work you have put into it
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