Join Australia's most dynamic and respected property investment community

Investing (shares) in a trust or spouse

Discussion in 'Accounting & Tax' started by Bran, 5th Apr, 2016.

Tags:
  1. Bran

    Bran Well-Known Member

    Joined:
    20th Jun, 2015
    Posts:
    3,220
    Location:
    At work
    I'm just trying to get my head around some issues

    If you invest in a trust, or your non-income earning spouse starts buying shares, then is the money transferred into their respective accounts considered income?

    I saw an option for a commsec account in a trust today - can I simply set this up and buy shares? The money would come directly from my personal account, but I would have no reasonable means to pay money into this trust via this route except to invest.

    How to get around this?


    (PS, I will ask my accountant when I get a daylight hour).
     
  2. Paul@PFI

    Paul@PFI Tax Accounting + SMSF Business Member

    Joined:
    18th Jun, 2015
    Posts:
    2,385
    Location:
    Sydney
    You dont normally invest in a trust unless its a fixed unit trust.
     
  3. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

    Joined:
    18th Jun, 2015
    Posts:
    8,993
    Location:
    Sydney
    You mean if the trustee of a trust invests...The trustee has to get the money to invest first. Someone, possibly you, would either lend the trust money or gift it/settle it upon trust. Whichever you do make sure it is properly documented.

    Same with a spouse.

    If you are borrowing the money that will end up in the trust then the interest will only be deductible to you if the money is loaned at a higher (or maybe the same) rate that you are paying and there is a commercial loan agreement in writing.
     
  4. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

    Joined:
    18th Jun, 2015
    Posts:
    8,993
    Location:
    Sydney
  5. teetotal

    teetotal Well-Known Member

    Joined:
    7th Nov, 2015
    Posts:
    398
    Location:
    Sydney
    Looking at the topic heading, i was going to suggest that you invest in a good spouse ;)
     
  6. Bran

    Bran Well-Known Member

    Joined:
    20th Jun, 2015
    Posts:
    3,220
    Location:
    At work
    Ok, let's forget the trust.

    How does my wife buy shares with no income? Can we just transfer cash from our joint account to her investment account?
     
  7. Chilliblue

    Chilliblue Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    1,579
    Location:
    Australia
    Yes
     
    Bran likes this.
  8. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

    Joined:
    18th Jun, 2015
    Posts:
    8,993
    Location:
    Sydney
    If your not borrowing simply open a comsec account in her name and have her buy the shares.
     
  9. Paul@PFI

    Paul@PFI Tax Accounting + SMSF Business Member

    Joined:
    18th Jun, 2015
    Posts:
    2,385
    Location:
    Sydney
    Transfer of money between spouses etc is not income. Its just savings / cash.
     
  10. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

    Joined:
    18th Jun, 2015
    Posts:
    8,993
    Location:
    Sydney
    And consider the estate planning aspects as well.