Hi Guys I need advice as I really don't understand how trusts work. Would love for someone to help shed some light please as I am very new to this. Scenario: 1. We bought land in discretionary trust 2. We are looking to transfer this land back to the beneficiary to be able to get the most from negative gearing benefits 3. The property is in Victoria so we understand from SRO that no duty is payable when transferring an asset to a beneficiary according to Div36a 4. However, i am confused as to whether this will trigger a CGT event. Can we transfer the property at Cost or do we have to transfer at MV? If we do transfer at MV, do i have to pay consideration for the property or can it all be on paper? 5. How will the gain be treated in the individuals tax return? I have revenue losses from share trading back from few years back when i did share trading as a fulltime gig, can i offset these against the trust distributions in my individual tax return or not really as they would be considered capital in nature? Any help and assistance is so so so appreciated. Regards Kruti
Who is the trustee? If you have revenue losses from share trading, how have you not claimed them now? You dont have any other income?
CGT will apply at market values. You really need legal advice as if you transfer this without doing it properly none of the interest on the loan would be deductible. If the trustee distributes a capital gain to an individual any income loss they have should be able to reduce any CGT payable. But it is probably unlikely they have an income loss unless they are not working.
Kip, I found out long time ago that you could not ask these type of questions here. Noone could help freely as we are not legally xxxly ffffly qualified. I gave my accountant a call and he would help. If your accountant can’t help you, maybe try another one? If he can, all good.
And even if someone could give you advice, would you really rely on the word of an anonymous person on an Internet forum? Marg
We take financial advice from the Uber driver, marriage counselling from the taxi driver, why not legal advice from anonymous randoms?
Its a corporate trustee. I haven't had a chance to claim them as i fell pregnant and took time off working.
Yeh my accountant is pretty rubbish... i need to find a another one. If anyone has recommendations for someone in Melbourne i am all ears.
If you have a carried forward income loss it will reduce any future taxable income you have, including if you receive a capital gain.
It might be the ideal time now for transferring from the trustee to a beneficiary, but make sure you get legal advice in addition to the tax advice.
Well spotted. Kip, how can you have an income loss while still getting $100k wage? Perhaps the loss is well over $100k!
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