One strategy that doesnt get much airtime on PC that can be used by wealthy is to buy property in the name/s of children. Its something that must receive legal advice as it can lead to a number of benefits and risks ! Key issues : - Potential access to a further land tax threshold - Legal capacity - eg NSW Minors (property and Contracts) Act 1970 specifically allows kids (even a new born) to own property and contracts are not void. However special requirements are required for title to be given in the childs name. Persons under 18 may have rules that limit property dealings. A solicitor must advise on this and likely needs to prepare a certification which may be signed by parent/s and /or legal guardians. - Asset protection benefits - Asset protection risks - Taxation concerns for a minor in receipt of unearned income may be taxed at a high rate (positive gearing) - Access to first home buyer concessions - Negative gearing can defer and provide a future tax or CGT benefit. Parents may lend to the minor as a example. - CGT main residence concessions (tax law doesnt say the family home must be owned by parents). Note bankruptcy risks can occur if this strategy is used to defeat creditors sometimes. When used well in advance it may be an asset protection benefit. - CGT main residence limits (one property per family as a rule) - Inability to obtain or contract for finance in many instances (hence the wealthy issue) Many legal advisers may recommend forms of trusts be used also.
The resulting trust issues need to be carefully considered when 'buying' in a child's name. Where the children are young adults there are other strategies such as sale of an existing property to them at full market value. Perhaps even under a vendor finance arrangement.
Can you put properties in the name of your pet (i'm serious)? Does legislation preclude people from doing this?
Are they a person ? I may argue even if it was technically permitted a trust issue would likely arise.
