Buying Property and Using the Protector for Tax Purposes Versus Buying in a Family Protection Trust

Adviser Question

The Protector - as a special purpose trust would this result in land tax being payable or no, as the assets are in individual title?

I have a client wanting to purchase commercial property is the protector suitable in that situation?

Abbott & Mourly Advice

The choices are two fold:

1. Buy the commercial property in the individual's names and then transfer the net equity into a Family Protection Trust. This leaves the tax and land tax liability in the name of the individual.

2. Acquire the property in a Family Protection Trust which is a family lineage trust and it will become the tax and land tax liability entity. It is important that the Trust has a non-foreign person beneficiary clause so there is no land tax surcharge.

If there is no negative gearing Option 2. is preferred.

Please be advised this is general information only, and is not to be taken as legal advice. If you would like more information, or have a legal query, please contact Abbott & Mourly directly.
Reviewed: 17/01/2024