Unit trust and FHOG

Discussion in 'Loans & Mortgage Brokers' started by Muhammad Ali, 14th Jan, 2020.

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  1. Muhammad Ali

    Muhammad Ali New Member

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    Hi, i have a hypothetical question; if I am one of the beneficiaries of a Unit Trust, which owns a house rented to another unit trust (of which i am the benefit as well... I will use it as my PPOR under the second trust) will I be eligible for FHOG (provided i fulfill all other requirements).

    My problem is that i have moved to Tasmania for job purposes and i might move back to mainland in a year or two. My intention is to buy a property here (my first) and live in it and when i move back to the mainland, i want to be still eligible for FHOG.

    Any advice will be appreciated. Thanks
     
  2. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney

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    Under nsw law you would likely be eligible if you meet the other requirements.
     
  3. Paul@PAS

    [email protected] Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    If the unit trust has human trustees and one of them is you then you may have issues. Otherwise its fine where a corporate trustee is used at all times. The use of a trust to protect first owner concessions for duty and grants has long been a mechanism to preserve the personal benefit until later.

    My problem is that i have moved to Tasmania for job purposes and i might move back to mainland in a year or two. My intention is to buy a property here (my first) and live in it and when i move back to the mainland, i want to be still eligible for FHOG. - That fails on all levels as you will have owned AND resided in a property you own in Australia.
     
  4. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney

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    See the definition of 'relevant interest' in the FHOG Grant Act. s5
     
  5. Paul@PAS

    [email protected] Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    Yes it can be a devil when you taint the process using your name when you shouldnt. 5(g) particularly can be harder than most realise. The Commissioner can form a view you cant shake. The Commissioner can apply this view to a spouse too of course.
     
  6. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney

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    Do you mean s 5(2)(g)?
    It would be very unlikely this would apply - this is the situations similar to a property with company title.
     
  7. Paul@PAS

    [email protected] Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    The Commissioner says prove me wrong re exclusive occupancy. A lease with another party is sufficient ie a true IP. But related parties....no.

    I also once saw someone who thought it was clever to have a DT as unitholder to mask ownership....And a land tax bill...Probably a surcharge too now :-(
     
  8. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney

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    highly unlikely.
     
  9. Muhammad Ali

    Muhammad Ali New Member

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  10. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney

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    Only lawyers can advise on the FHOG so go and seek some legal advice, probably best to decide which states you might be buying in first as this is state legislation.
     
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  11. Paul@PAS

    [email protected] Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    And remember states look at any property acquired in another state.
     

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