Land Tax on Discretionary Trust

You will have to consider their land tax positions in that case as well as their tax situation, estate planning, asset protection on bankruptcy, divorce and death, and incapacity.

And don't forget finance.

 

I wouldn't say that there may be a chance, i would say there would most likely be little or no chance of being caught and that I can ensure you it is happening in the thousands with little or no governance.

 

Wife and kids don't work or have other properties. There is the always the chance of something but that's a risk you take to avoid land tax.

Unless you have a better suggestion which I think we can summarise from this thread is not the case as there has been a lot of debate and valid information but no one with any advice or ideas.

Finance, what do you mean, do you mean existing finance on the property?

 

In that case you would have to ask youself if you could break the law and have 'little or no chance of being caught' should you do it?

 

Kids under 18? they would pay up to 66% tax on the income.

I suggest you seek proper legal advice.

Changing the terms of the trust would need permission of the mortgagee and this would likely mean a new loan application with new guarantees.

 

Is it a legal requirement to register for land tax?

If that is the case then why do the vast majority of average Joes out there with discretionary trusts not have any idea about it?

 

I don't know if there is a legal requirement to register, but the OSR says if you 'need to' if you think you might be liable.

I cannot see anything in the land tax management act quickly browsing it.

 

I believe that it is not a legal requirement and therefore the scenario I outlined in my previous post is in fact not breaking the law.

 

If it is not a legal requirement to register it is still a legal requirement to pay each year.

 

Here is the legislation which requires registration
s 12 Land Tax Management Act
LAND TAX MANAGEMENT ACT 1956 - SECT 12 Taxpayer to furnish returns

If the Chief Commisisoner has published such an order in the Gazette.

 

All very airy fairy as per normal

That act i from 1956, I believe date is 31 March not Jan

 

I don't understand what you mean.

 

My mistake, disregard

Do you pay land tax Terry?

 

Yes

 

But I'm assuming that unlike me you can offset that against income.

 

Land tax is tax deductible. If the trust has negative income the loss maybe able to be carried forward.

As rents grow the loss can be used to reduce income of the trust.

 

Yes I understand that but a loss is still a lost and any any reductions will be far into the future while still only partial.

All bearing in mind that the land tax continues to increase over time as well.

Not sustainable I'm sure you'll agree.

In your case I'm sure you offset it against your personal income, If I could do that it would be an easier pill to swallow.

 

Could be both or even a company too. It depends on the unitholders other land.

 

The threshold increases with time too... This years NSW threshold is 13.9% up on the prior year. Land values up of course but remember averaged over three years.

 

Its probably 100% correct. You would like to think its excessive.