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GST and Trust

Discussion in 'Accounting, Tax & Legal' started by DaveA, 15th May, 2007.

  1. DaveA

    DaveA Well-Known Member

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    if your trust pays for expenses and is GST registored, are you able to claim the gst credits back from the ato?

    If it was a normal business i think it would be no problem, however in a trust you are not actually getting any gst income (as credits would usually offset the amount payable to the ato), so in affect you would actually be claiming a refund every quarter.

    id imagine the ATO wouldnt like this happening but is it legal???
     
  2. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    Your trust wouldn't need to be registered for GST - most investments and financial supplies are input taxed.

    Unless you were trading a business through your trust:

    eg: My_Company_Trustee_P/L As Trustee For My_Trust Trading As My_Business

    ... but that's really not a good idea.

    Nice thinking - but I don't think it's something that will work.
     
  3. DaveA

    DaveA Well-Known Member

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    yep just trying to think outside the square...

    id imagine that maybe utility bills and say services such as pest and buildings, buyers agents and even repairs are not input tax, so would you think they could be claimed,

    or do you have to be a trading business to trade back gst credits? is that the distinction your making?
     
  4. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    I think that's it ... I'd have to get Nick to confirm.
     
  5. NickM

    NickM Co-founder Staff Member

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    If you own say a commercial property in a trust and income > $50K ( soon to be $75K) you cana register for GST. If you pay accouting fees on credit card then your trust can reimburse you and claim back the GST
    Nickm
     
  6. DaveA

    DaveA Well-Known Member

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    i thought you could opt even if it was under it to register for GST as a business?? so could you opt even if it wasnt meeting the income??

    or does it have to be commercial and atleast $50k, so you couldnt do it with residential property...

    what would happen say if it was a share trust which only traded the shares, it couldnt meet the test of 50k so what would happen then...
     
  7. bundy1964

    bundy1964 Well-Known Member

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    I know I opted in with GST for my commercial stuff, resi is input taxed wether your have GST reg or not. GST on share trades there is a formula or was to work it out on the ATO site it wasn't worth the hassel imho.
     
  8. NickM

    NickM Co-founder Staff Member

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    You can opt to register if the business income is under $50K
    Bundy is right with the shares - 75% is claimable.
    you would only do it if you were buying a comm property from a GST registered person
    NIckm