The advantages of buying property in a Trust.

A Trust enables a person or company to own assets on behalf of other people.

The Trustee is the person that owns/controls the asset and the beneficiaries are the people for whom the asset is owned.

The three main Trust structures are:

·       Unit Trust

The asset is split up into portions (units) and the beneficiaries own these units, similar to a shareholding in a company.

·       Family Discretionary Trust

The Trustee can use their discretion to distribute the income and assets to the beneficiaries, allowing family members to take advantage of tax benefits.

·       Hybrid Trusts

This sort of trust is a combination of a unit trust and family discretionary trust, which allows beneficiaries to hold units in the trust whilst giving the trustee the power to distribute income as they wish.

Take note of the following if you are considering buying a property using the trust:

·        If you own an investment property individually, if you transfer it into a trust, you will need to pay stamp duty and you will be liable for CGT.

·         If the trust makes a capital loss or a rental loss on an investment property, the loss cannot be offset against any other investment income and you won’t be able to use negative gearing.

The biggest benefits of buying an investment property through your trust, is the asset protection aspect and tax benefits.

Also, each trust features a trust deed which outlines the rules of the trust and what will happen to each beneficiary’s share of the assets upon their death.


Want to know more about trust property loans?


Contact us @ propertyloans@realrenta.com and we will arrange for our trusted finance partner to contact you shortly for a no obligation discussion.


Marlene Liontis
Wednesday, 4 December 2019

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