The Structuring Podcast

Fan Mail - Send us a Text Message If you borrow to buy shares the interest may be deductible if there is an expectation that the shares will produce income - dividend paying shares. Listen to find out more. www.structuring.com.au Support the show www.structuring.com.au

Fan Mail - Send us a Text Message What happens if the trustee goes bankrupt or the appointor goes bankrupt, or the shareholders of the trustee company go bankrupt, or if a beneficiary becomes bankrupt? www.structuring.com.au Support the show www.structuring.com.au

Fan Mail - Send us a Text Message There are 4 broad steps involved in debt recycling - listen to find out what they are. www.structuring.com.au Support the show www.structuring.com.au

Fan Mail - Send us a Text Message Some people think CGT can be reduced by moving into an investment property before selling it. This can work in a very minor way, but won't save much tax at all usually. www.structuring.com.au Support the show www.structuring.com.au

Fan Mail - Send us a Text Message This episode covers reimbursement agreements and trusts where arrangements are made so that person A pays the tax but person B enjoys the benefit. The ATO are focusing on this area in 2022. www.structuring.com.au Support the show www.structuring.com.au

Fan Mail - Send us a Text Message If you have parents that are renting, it can be a good idea to help them buy  a property of their own instead of yourself buying a property and renting it to them. This way the property can be CGT free, exempt from land tax, give you good asset protection and potentially great tax savings at a much later date. This episode discusses some strategies as to how you c...

Fan Mail - Send us a Text Message Companies holding property are taxed differently to individuals holding property. There are different deductions available as well as different CGT treatment. Find out more here in this episode. www.structuring.com.au Support the show www.structuring.com.au

Fan Mail - Send us a Text Message Companies are separate legal entities and can be used to own property like a person can. There can be many advantages and disadvantages to using a company structure and in today's episode we touch on a few of these. www.structuring.com.au Support the show www.structuring.com.au

Fan Mail - Send us a Text Message How does the claiming of interest work when the shares or property are held by the trustee of a discretionary trust? Who claims the interest? What happens if the money the trust uses to invest comes from a loan in the name of someone other than the trust? www.structuring.com.au Support the show www.structuring.com.au

Fan Mail - Send us a Text Message In limited circumstances it is possible to retain the main residence exemption from CGT where the main residence is actually rented out. This is generally for a period of up to 6 years and is known as ‘the 6 year rule’ for CGT. Find out more in this episode. www.structuring.com.au Support the show www.structuring.com.au

Fan Mail - Send us a Text Message When a discretionary trust is initially set up the trust will generally have assets of just $10 or so coming from the settled sum. If the trust is going to invest it must get some more money from somewhere. There are basically 2 options which are to receive gifts or to borrow money. www.structuring.com.au Support the show www.structuring.com.au

Fan Mail - Send us a Text Message A discretionary trust is not a legal entity, but the trustee of the trust can hold property as trustee. There are a number of things to consider though as in some states a trustee holding property could result in up to $11,000 more land tax per year than an individual holding property. There are also estate planning and lending issues to consider. Legal advice is...

Fan Mail - Send us a Text Message The main residence is virtually the only tax free appreciating asset that a person can buy so it is important to learn about the main residence exemption so you can use it to your advantage. However now all main residences will be exempt from CGT. www.structuring.com.au Support the show www.structuring.com.au

Fan Mail - Send us a Text Message A Company is a separate legal entity and can own property just like a person can. However there are a number of issues to consider before using a company to own property and some of these issues include the following. CGT and income tax is a flat rate Losses are trapped Borrowing requires directors guarantees Land tax Succession - you cannot leave the property via...

Fan Mail - Send us a Text Message A testamentary trust is any trust set up in a person’s will and a testamentary discretionary trust is a discretionary trust set up in a person’s will. They have all the benefits of a discretionary trust set up during a person’s lifetime, but with more. Minor children can be taxed at adult rates of tax on income derived from a deceased estate, including indirectly...

Fan Mail - Send us a Text Message Land Tax is a State based revenue grab with each state having completely different laws. Generally people will be assessed for land tax based on the value of the land that they own in a particular state that is over the land tax free threshold with the principal place of residence usually excluded. www.structuring.com.au Support the show www.structuring.com.au

Fan Mail - Send us a Text Message Lenders are always ignoring instructions and often put extra borrowed funds into the wrong account and this can cause deductions of interest to be lost if this were to happen. But there is a simple solution where this happens. www.structuring.com.au Support the show www.structuring.com.au

Fan Mail - Send us a Text Message Some people put money into a loan in order to save interest. This is repaying the loan. When that money is redrawn it is considered new borrowings for tax purposes. Because of this you should never temporarily park money into a loan which is deductible. This is because when you redraw the money later you will potentially lose the deductions on that portion of the...

Fan Mail - Send us a Text Message A mixed loan is a loan that has been used for more than 2 uses. An example is someone who has borrowed to buy a house paying extra off the loan and then using the redraw facility to borrow money to use as a deposit on an investment property. Mixed loans should be avoided in situations like this as every deposit into the loan will reduce the deductible debt as well...

Fan Mail - Send us a Text Message What is Debt Recycling?  It is a tax strategy which involves converting non-deductible debt into deductible debt. This doesn’t involve investing in something you otherwise wouldn’t have, but shows how you can structure the way you do it to save income tax. www.structuring.com.au Support the show www.structuring.com.au

Fan Mail - Send us a Text Message The 4 main roles in a discretionary trust are:   a)  Trustee   b)  Settlor   c)  Appointor   d)  Beneficiaries www.structuring.com.au Support the show www.structuring.com.au

Fan Mail - Send us a Text Message Borrowing and parking the borrowed money in an offset account before it is used comes with a risk of breaking the connection between the borrowings and the investing which could mean interest on the loan is not deductible or only partially deductible going forward. www.structuring.com.au Support the show www.structuring.com.au

Fan Mail - Send us a Text Message There are 4 major things to consider in relation to asset protection:   a)  Creditors and Bankruptcy   b)  Death   c)  Incapacity   d)  Family Law What could happen to ‘your’ assets if any of these happened to yourself or others? www.structuring.com.au Support the show www.structuring.com.au

Fan Mail - Send us a Text Message Before purchasing any major asset there is a checklist of things to consider and this includes, but is not limited to:   a)  Income Tax   b)  CGT   c)  GST   d)  Stamp Duty   e)  Payroll Tax   f)  Estate Planning   g)  Asset Protection   h)  Finance Both the immediate and long term future affect on all of these needs to be considered. www.structuring.com.au Suppor...

Fan Mail - Send us a Text Message Income tax is worked out by the formula: Tax Payable = Taxable Income x Tax Rate With taxable income being worked out by working out the assessable income less tax deductions. Taxable Income = Assessable Income - Deductible Expenses So it follows that tax can be reduced by reducing your taxable income which could be done by either or both of reducing your income o...