using funds of bucket company to buy house to live in?

Hi forum members,

My situation:
-I'm a business owner who would like to buy a house for myself to live in long-term (principal place of residence, PPR) in NSW
-I don't want to buy the house in my own name for asset protection reasons.
-My bucket company (a separate pty ltd which is NOT trading) has sufficient funds to buy a house

How should I structure the purchase of my PPR?

Your thoughts and advice are highly appreciated.
P.S. I am planning to get professional advice too, however I find the contributions and experiences of forum members invaluable. Many thanks in advance!

 

...who owns the bucket company?

 

the bucket company is owned by a discretionary trust (family trust). I'm the beneficiary of the discretionary trust.

 

If the bucket company buys it you would have Div7A issues

 

You realise that if it's not going to be in your name then it's not a PPOR right?

 

Who is the trustee of the family trust?

 

Learning for me question. If the bucket company buys it and retains ownership of it and doesn't give it to the OP then is there still Div7A issues?

 

a corporate trustee (Pty Ltd) owned by me

 

i'm not really sure what the definition of ppor is. what i mean is that i'd like to live in the house.

 

Can Div7A issues be avoided if the OP pays the bucket company market rent, etc?

Land tax will be payable, no capital gains discount or exemption, property will not form part of your estate?

Is the trustee company a different company to the bucket company?

 

Yes because the company is providing a financial benefit to a shareholder or associate of a shareholder.

 

Not necessarily.

 

Potentially.

 

Yes the trustee company is a different company

 

i found this ato info: Division 7A - Use of assets
if the market rent of the house owned by my bucket company was 60k pa, and i lived in the house owned by my bucket company does that then mean that the 60k will be added to my personal income according to div7a because i'm using company assets for personal purposes? e.g. my personal income is 100k, then i need to add the 60k , so my total taxable personal income will become 160k?

 

More like, you have to pay the company 60k in rent, since you are renting the house from the company. You pay the 60k from your personal after tax dollars, and the company further pays tax on the 60k as income. Even then you still need professional advice around d7A.

Plus land tax and no capital gains discount if the company sells.

 

if that's how it is it then it's not very tax efficient unfortunately.

 

The Div7A laws were designed to try to prevent these things from happening.

 

Yes

 

If you purchased a PPOR in your own name using borrowed funds, that might provide a level of protection.

The bank has first dibs on the asset.

Your equity would be at risk but not the whole property.