Hello. I have just sold a property in NZ which is freehold and I owe nothing on it. Before I bring the money to Australia I am seeking the possibility to start a discretionary trust. My back ground is: My partner and I of 8 years had seperate assets when we met (my house was mine). I have a son (12) and my partner and I have a daughter (5). We have joint assets (cash) now but I want to protect this money and to make some wealth in my own right. I am an Australian Citizen now and plan to live here for the rest of my life and continue to build my wealth through property. My two children would be beneficiaries and myself as the appointed and trustee for now. Am I best to start a discretionary trust for benefits Im not 100% clear on OR bring the money over here and buy property in my own name OR is there another avenue I haven't thought of? Thanks
What are you trying to protect from? Younshould carefully consider things before you bring the money over.
Hi Terry. I am wanting to protect it from a relationship breakdown, my partners family (we have farms together that could one day not end pretty) What are your concerns of me bringing my money over here? Thanks
Trusts are attackable under family law disputes so make sure you get some legal advice. Once your bring cash over it will be exposed to the Australian laws. It will anyway but it will be harder to attack overseas and there are a number of asset protection strategies you can implement as well.
Mmm ok Terry, thank you. My only issue not brining it over here is I can't create my wealth very fast as I can't get a Australian mortgage to service a NZ property if I want to buy more. I understand that the money will now be subject to stamp duty and CG which annoys me. I understand that the trust could still be attackable but do you think if I can prove that my intention of setting up the trust was primarily to protect assets for my beneficiaries therefore bringing the money directly into trust bank account and then assets purchased in the trust name would have a better leg to stand on if someone was to take me down? Am I really wasting my time with a trust? I just down know how else to protect it other than getting a prenup.
If you are an Australian resident taxpayer the property was always subject to some CGT. You need to seek advice to avoid a issue with undeclared income. The ATO share data with IRD in NZ on people who sell land in NZ.
You can still use your money but set up some techniques. One might be for you to gift money to a nz trust and then that trust could lend you that same money. The trust will be a creditor of you if something goes wrong. Money isnt subject to stamp duty or cgt.
As far as I am aware it was money earned in another country that doesn't have CGT therefore not liable for CGT here in Australia until that money is earning money, then it is liable for CGT here in Australia. Is that not right? and if its directly put into a trust won't the trust incur a 50% CGT rebate if owned for more than 12 months?
The nz trustee could lodge a mortgage over australian property to protect its money. But any loans are debts and would need to be declared.
