Join Australia's most dynamic and respected property investment community

family trust question

Discussion in 'Legal Issues' started by scientist, 5th Nov, 2015.

  1. scientist

    scientist Well-Known Member

    Joined:
    23rd Jul, 2015
    Posts:
    89
    Location:
    sydney
    If I, as a primary beneficiary of the family trust gift 100k to the trust, then wind it up (as the director of the trustee company) and distribute the 100k back to me, do I incur a CGT on the 100k? or even if I don't wind it up, but simply distribute this capital back to myself, does it get CGTed?
     
    Elives likes this.
  2. Greyghost

    Greyghost Well-Known Member

    Joined:
    23rd Jun, 2015
    Posts:
    1,262
    Location:
    Melbourne
    Short answer is no.
     
  3. scientist

    scientist Well-Known Member

    Joined:
    23rd Jul, 2015
    Posts:
    89
    Location:
    sydney
    Thank you, that's a relief.
     
  4. Greyghost

    Greyghost Well-Known Member

    Joined:
    23rd Jun, 2015
    Posts:
    1,262
    Location:
    Melbourne
    When funds are originally deposited it will be "funds contributed" against your beneficiary account. Similarly when you withdraw the funds it will be drawings against your beneficiary account.

    The account will also have any profits distributed to you (for which you pay tax on on your personal name). So the tax will be paid each year on your distribution, and the balance in the account will represent what you are entitled to call upon (draw out).
     
  5. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

    Joined:
    18th Jun, 2015
    Posts:
    9,021
    Location:
    Sydney
    Keep in mind the terms of the deed. Can vesting be brought forwaed and you are a capital beneficiary
     
  6. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

    Joined:
    18th Jun, 2015
    Posts:
    9,021
    Location:
    Sydney

    Gg wouldnt that only be the case if it was a loan. If it was a gift there there wouldnt be a beneficiary account?
     
    Elives likes this.
  7. Greyghost

    Greyghost Well-Known Member

    Joined:
    23rd Jun, 2015
    Posts:
    1,262
    Location:
    Melbourne
    You are correct Terry. My oversight.
    I guess OP needs to be clear on the nature of the original funds put into the trust..
     
  8. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

    Joined:
    18th Jun, 2015
    Posts:
    9,021
    Location:
    Sydney
    But the corpus of the fund could still be distributed tax free as long as it was not income, s99B(2)(a) ITAA36
     
  9. scientist

    scientist Well-Known Member

    Joined:
    23rd Jul, 2015
    Posts:
    89
    Location:
    sydney
    wow it always gets more complex doesn't it! thanks for the input ghost and terry
     
    Elives likes this.
  10. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

    Joined:
    18th Jun, 2015
    Posts:
    9,021
    Location:
    Sydney
    Trusts are extremely complex. I am still learning things every day.
     
  11. D.T.

    D.T. Adelaide Property Manager Business Member

    Joined:
    13th Jun, 2015
    Posts:
    5,595
    Location:
    Adelaide, SA
    For the everyday uses that a buy and hold investor would do, trusts are pretty basic.
     
  12. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

    Joined:
    18th Jun, 2015
    Posts:
    9,021
    Location:
    Sydney
    At first glance...