Anyone do this? Curious... .probably to simple a question, but interested on views on this Thanks MTR
Generally not. Car can be a valuable asset that could be taken if the trust is attacked. Keeping assets and businesses separate is generally a good idea. FBT could probably an issue too, depending on what you're doing?
What are the implications of personal use assets/items owned via a trust structure when the trust owns other investments and doesn't carry on a business?
Lots! They are not your assets for starters. The trustee needs to have the power to let you use those assets, if they don't then a breach of trust. Can't be left at death, can't be sold by you. Could be good if you are bankrupted, bad if you die!
I would be worried about accidents. Could the owner of the car be sued? I am not sure, but it could probably happen if there was a defect in the car that caused an accident. Then the trust assets are exposed.
If the trust operates a business also consider FBT etc. If it doesnt then perhaps the deduction arent now deductible. Certainly the individual or business has incurred no expense if the trust owns the vehicle. And there could even be GST issues if you get it wrong (eg cant claim tax credits). Use of the car may even be a trust entitlement. The ATO expressed concerns about bucket companies that own private use assets funded by distributions. eg cars, holiday homes, boats etc Personal advice is best
Use of a company asset by a shareholder or associate would be a Div7A issue as the company is providing benefit. Not such an issue for a trust unless the trust has UPE to a company.
There may be commercial reasons for a trust to own business use assets and lease them to the business. ie a financing arrangement. Needs to be established well and a lawyer would always be involved. Pricing needs commerciality. I have seen taxpayers use it the other way about too eg a bucket company leasing assets to a trust that operates a business.
