More Information - Unit Trusts to Hold Property
Most MGS unit trusts are available with THREE VERSIONS - Trustee Discretion, Absolute Entitlement and % Consent (Up to 100%) dealing with redemption rights as well as ability to issue further units, vest and change the terms of the trust. These terms are critical whenever a SMSF investment is being considered as well as many others instances such as unrelated or distantly related investors.
TIP : NEVER buy more than one property in a trust. Unintended CGT, Land Tax (some states) and stamp duty issues occur. Multiple trusts can share the same Trustee. TIP : First Home Buyers - Buying an investment property before a first home??? Beware - You may lose first home buyer benefits. MGS can suggest a strategy to safeguard this. Call us for assistance.
In 2007 the NSW OSR appeared to signal an end to the use of a unit trust to own property. Not true. Advisers have been recommending investors buy property in their own names. This loses valuable concessions like refinancing to repay non-deductible debt, allowing a SMSF to buy some or all of the units later, the ability to "change ownership" without stamp duty ($2m limit). The NSW LTUT allows one, two or even three land tax thresholds for unitholders. MGS offer the LTUT with a OSR Ruling. This trusts is a MUST for any mum and dad investor who has a personal land tax threshold to keep that benefit and add the benefits a unit trust offers. There is no better structure available for NSW property investors. Save up to $6,000 pa in land tax.
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Changes in 2007 made property ownership using a trust more difficult. Advisers have been recommending investors buy property in their own names and not considering the benefits a trust offers. This loses valuable concessions like refinancing to repay non-deductible debt, allowing a SMSF to buy some or all of the units later, the ability to "change ownership" without stamp duty ($1m limit). The VIC Property Trust allows one, two or even three land tax thresholds for unitholders. MGS offer a OSR Ruling that the trust satisfies the requirements of a fixed trust. This trusts is a MUST for any mum and dad investor who has a personal land tax threshold to keep that benefit and add the benefits a unit trust offers. There is no better structure available for VIC property investors.
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Changes in 2007 made property ownership using a trust more difficult. Advisers have been recommending investors buy property in their own names and not considering the benefits a trust offers. This loses valuable concessions like refinancing to repay non-deductible debt, allowing a SMSF to buy some or all of the units later, the ability to "change ownership" without stamp duty ($2m limit). The WA Property Trust allows multiple land tax thresholds - ONE per trust. This trusts is a MUST for any mum and dad investor who has a personal land tax threshold to keep that benefit and add the benefits a unit trust offers. There is no better structure available for WA property investors.
A large number of investors want to buy in QLD. Smart investors often want to use a unit trust in QLD too. In QLD each Trust gets a separate land tax threshold which sounds too good to be true. But proceed with caution! The QLD Stamp Duties Act contains some significant issues with using a Trust to own property in QLD. It can result in a stamp duty trap but if you know about this before acting it can be avoided. Nobody else provides this warning. Advisers to smart investors use MGS to avoid the traps with buying cheap trust deeds from unqualified document sellers. MGS are qualified and experienced practitioners.
By the way MGS don't sell a QLD Property Trust... Order a standard Unit Trust, or the Hybrid Discretionary Trust for Negative Gearing.
Hybrid Discretionary Trusts are a popular structure for property investors. The features of a HDT are discussed in this paper. The Australian Taxation Office issued TD 2009/17 which addresses concerns with HDT's and their use to enable FIXED rights available to a unitholder (claiming tax deductions) to be deferred or retained so that DISCRETIONARY beneficiaries could receive benefit. Particular concern is raised about :
The Commissioner has a programme to deny unitholders in a HDT some interest deductions. At present this only affects large refunds. However, the Commissioner has used these taxpayers to test the waters for smaller taxpayers like Mum & Dad investors. MGS has been working with ATO Officers over a period of three years to identify each concern. MGS has developed this HDT for Negative Gearing to incorporate every known concern ever raised by the Australian Taxation Office.
The MGS HDT for Negative Gearing is a comprehensive solution to the HDT concerns raised by many tax advisers. While it suits any investor that seeks to acquire property it is not confined to use with just a negative geared property. It may be used by any property investor. Other MGS trusts which may suit property investors include:
Property Development is complicated. Choose the wrong structure and you just throw away the profits. Each structure is different but common features can include:
For more details Contact us as a personally tailored solution should be considered on a case by case basis.
