Join our investing community

Moving assets to trust

Discussion in 'Accounting, Tax & Legal' started by Simon Hampel, 15th Sep, 2005.

  1. Simon Hampel

    Simon Hampel Co-founder Staff Member

    Joined:
    9th Jun, 2005
    Posts:
    4,619
    Location:
    Sydney, Australia
    We have a small share portfolio held in personal names that I would prefer to have in our trust where our margin lender will provide margin value against the portfolio.

    What's the most effective way to get the assets into the trust ? Is it possible to avoid CGT ?

    It's an ordinary discretionary trust.
     
  2. Gonzo

    Gonzo Well-Known Member

    Joined:
    16th Aug, 2005
    Posts:
    49
    Location:
    Singapore
    I went through a similar thing this year. The advice I received was that we had to sell the stocks in our personal names, triggering CGT, and then repurchase them in the trust.

    Annoying and costly, but it was the only way I was told I could do it. There doesn't seem to be a way just to transfer the stocks across so you'll be up for brokerage fees as well.
     
  3. NickM

    NickM Co-founder Staff Member

    Joined:
    20th Jun, 2005
    Posts:
    321
    Location:
    Sydney
    Unfortunately, Sim CGT will rear its ugly head.

    Can be minimised with some clever tax planning, eg prepaying interest on margin loan + properties etc at year end

    NIckM
     
  4. MichL

    MichL Member

    Joined:
    16th Aug, 2005
    Posts:
    9
    Hi Sim,

    Further to Nick's advice, you may want to keep the shares where they are, and take the margin loan out in the trust's name using yourselves as guarantors.

    If you don't need the dividends from your shares, have them paid out, and use them to add to your investment within the trust. You will need to pay tax on these dividends anyway.
     
  5. Jane

    Jane Active Member

    Joined:
    16th Aug, 2005
    Posts:
    36
    Stamp Duty too!

    Hi All,

    I did something similar too this year and had to pay stamp duty. Did anyone else? As well as capital gains, of course.

    Jane