Developing one parcel multiple entities

Discussion in 'Accounting & Tax' started by Cactus, 15th Aug, 2016.

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  1. Cactus

    Cactus Well-Known Member

    18th Jan, 2016
    My Brother and I are looking at doing a four unit site.

    I want to retain and live in one of the units indefinitely, probably even retaining as a rental property should i move out.

    My brother wants to retain one as a rental property.

    I have a family trust.

    Can I buy the property in 25% my name, 25% brothers name, 50% P/L ATF family trust name. Pay Equity amounts in these seperate individual/entities. On subdivision at Titles Office, have two units issued in the P/L ATF family trust, one in my name and one in my brothers name?

    Can I hold the investment as PPOR?
    Can my brother hold the investment on Capital Acc?
    Can Trust claim its share of GST, and hold on Revenue account?

    @[email protected] I have read your guide, and believe this to be possible if I live in the investment for atleast a couple of years, and rent it out for 2+ years (although no minimum just saying more than the 3 months). Further obviously holding no longer than 6 as rented investment to retain full PPoR exemption.

  2. Terry_w

    Terry_w Structuring Lawyer and Finance Broker - all states Business Member

    18th Jun, 2015
    Yes you can possibly do that. Look at my tax and legal tips on 'deeds of paritition'.

    get some good advice.
    Cactus likes this.
  3. Paul@PFI

    [email protected] Tax Accounting + SMSF Business Member

    18th Jun, 2015
    TD 92/135 is the relevant ruling you have ignored. This ruling adopts the view that where a property is constructed and gives rise to ordinary income even from a isolated transaction that a CGT event does not occur and thus the main residence exemption cannot occur as the MRE is a CGT exemption. not an income exemption.

    Deed of partition is a way BUT.. it comes with a GST issue