PPOR to HDT - who pays stamp duty?

Hi All,

I'm pulling together stuff to do last year's tax and have a question - I think I know the answer but wanted to make sure...

We transferred our PPOR into a HDT and I'm trying to allocate the various costs of doing this. We took out a loan to purchase units in the trust, which covered 80% of the value of the property.

The following is what I'm assuming:
Cost of finance (mortgage duty, bank fees, solicitor's fees, etc): I'm assigning this to myself (just like I would for any investment loan)

Cost of doing the transfer (stamp duty, solicitor's fees, etc): I'm assigning this to the HDT, as I believe it is part of the cost of purchasing the asset.

Does that make sense, or have I lost the plot?

On a related note, the property was valued at $300K. We took out a loan of $240K for purchasing units in the trust. The remaining $60K we've accounted for as a "Private Loan". I've just realised that I if I'm including these extra costs (stamp duty etc) in the trust then I need to increase the "Private Loan" amount to cover it, as the trust had no assets at the start of this tranaction? How does that sound?

Thanks.

John.

 

Hi Johnny
You are right that the purchaser pays the duty.

However, i do not think that you are entitled to negative gear your PPOR
Refer http://law.ato.gov.au/pdf/tr02-d02.pdf.

Given my discussions with the ATO and this ruling, I do not advocate using a HDT for negative gearing your PPOR.

NickM

 

Nick, thanks for confirming my thoughts.

And it's no longer our PPOR - sorry I wasn't clear in my original post. We purchased another property which is now our PPOR, and transferred the old one into the HDT to beome an IP.

John.