who rents from their trust?

[wakamole]

Who here rents from their trust?

 

[zed]

Who here rents from their trust?

I'm still trying to work out the implications of this.
Mine is a little more complex as I want my Aus trust to buy a property in NZ that I can move over and rent personally. I like the idea of paying myself and getting a tax deduction bonus.
(I can hear the accountants groaning already )

I don't know why they call the 'Double Tax an Agreement'
I sure as hell never agreed to it.

I let you know if it comes out in the wash.

zed

 

[wakamole]

Thanks Zed

anyone else like to contribute? I know Acy does.

I'm hoping to beat the bush and flush a few more out...











(and yes I have thoroughly searched archives)

 

[Timmsi]

Hi,

Were about to - in the process of sub-dividing our PPOR off a dual occupancy and once that is done our trust will be the owner and we will rent.

We have two other rental properties in the trust as well to help with the tax evasion issue (only 1 property in trust that you are renting).

There are benefits and disadvantages that we can see but we have weighed them up and come out that the property should be in the trust because long term we are not going to be living in this house and it will be tenanted - thus wanting the flexibility that the trust has.

Peter

 

[redwing]

looking at doing it ATM , I believe TMA (the Mortgage Advisor from PI) does it through a Company structure..

I believe there are precedents and it's legal (I have hear of people doing it otherwise)

REDWING

 

[Aceyducey]

Zed,

Market rent and arms length or it doesn't work legally.

The benefit is asset protection rather than tax.

I would not use a company structure - it's less efficient than a Trust (woth corp trustee)

Cheers,

Aceyducey

 

[bicko]

HI WAKA
what do you hope to achieve by flushing a few more people out.

Are you looking at pursuing this avenue of asset protection yourself.

 

[wakamole]

HI Biko
I'm hoping to open the door to a discussion specifically on this topic of renting to yourself.

It seems there are several people considering this avenue, including myself and Redwing, but may not have a chrystal clear picture of the pros and cons (like myself).

I've ordered Dale's books but I was hoping to hear from people who are actually doing it and the barriers they might have faced from "them" as theory and practice are often greatly diverged.

 

[redwing]

Hdt

Hi WakaMole..or Holy Wakamole..

Hopefully Acey Post some more Info as I am only dipping my feet into the water as with you..

I've read and recommend Dales Books, Ed BURTONS is worth a look as well.

I've found Dale (and his team- Thanks Coral) to be very approachable and helpful..

I'm mindful that everything has to be above board and dont mind losing the benefit of no CGT on sale (dont sell- move out in two years and put other tenants in as you move onwards and upwards).

I'd also love to hear from people on the Forum who are using the HDT or similar Trusts to thier benefit and any experinces or Tips they can provide would be great..if you dont want to Post for everyone to see..please PM me..


REDWING

 

[Aceyducey]

This topic has been discussed at some length already in the forum with accountants and other professionals also providing input.

I suggest starting with a forum search to learn more.

I've commented in the past & don't really want to keep repeating myself (except to say - search the forum before asking questions, then ask if you're unsure or if it hasn't been raised before).

Cheers,

Aceyducey

 

[redwing]

Trusts

Acey thanks ?

Search on renting+trusts was a great read

REDWING

 

[alwayscurious]

aha! A self confessed con..

but may not have a chrystal clear picture of the pros and cons (like myself).

I wouldn't have thought you were a Con?

I am considering doing this, however at the advice of my accountant - I am starting to fill the trust with other properties first, to set up a history & precedent. The trail of evidence should avoid getting 'pinged' by ATO.

The main benefit is for asset protection as Acey pointed out.

Cheers
ac

 

[geoffw]

I wouldn't have thought you were a Con?

Then maybe a pro?

 

[wakamole]

This topic has been discussed at some length already in the forum with accountants and other professionals also providing input.

I suggest starting with a forum search to learn more.

I've commented in the past & don't really want to keep repeating myself (except to say - search the forum before asking questions, then ask if you're unsure or if it hasn't been raised before).

Cheers,

Aceyducey

Thanks for the excellent advice on searching the archives Acy!

As I mentioned in my last post I have done a search and have read every post I could find on every configuration of Trust, HDT, rent + Trust, ppor + trust etc etc

There is quite a lot there - wow, that search function is great.

Perhaps I'm missing a key word or something but I don't see that many posts specifically from people who are actually doing it and their views.

 

[redwing]

sshhh..

Maybe once done everyone goes 'secret squirrel' on us?

or maybe they are to complex to post unless you have a clear understanding ( Like you I'm still learning)?

REDWING

 

[Ralph]

I have setup the structure, but won't rent the house for a while..............see below

I've just bought a house in a trust and will move in in a couple of years, renting it from the Trust. I have put another house into the Trust a couple of weeks ago which is a straight IP, no plan to live there.

I've done this through Dale (etremely helpful etc. etc. ).

Haven't heard of the precedent issue of "other houses into Trust first" as alwayscurios noted. Hadn't heard this would be an issue...? but I'll have had both renting to 3rd parties for a couple of years before I move in, so expect that should be sufficient precedent.

Cheers,

 

[wakamole]

Thanks Ralph - that's very helpful

My main motivation is cash flow, to be able to live in a suburb I want to and some neg gear benefits too.

Unfortunately that means sacrificing CGT exemption and FHOG. Still weighing up the pros and cons...

 

[redwing]

Wakamole..

From my understanding the best reasons to get into trust structures are asset protection, estate and retirement planning and as a bonus there are some tax benefits. You do however have to pay CGT on the sale of properties.

I'm also looking to buy shares through the HDT.

It has to be run as you would a business..

REDWING

 

[bicko]

look keep it at arms length, dont get tied up with whether its the first property or not. Just so long as you can make it clear that the purpose of the existance of the trust is for holding investments for the benificiaries.

or so Im told.

also dont go telling everyone what you are doing, thus raising unwanted suspicions or jealousy. excuse my spelling

I just know a couple of people that have done it before.