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renting your ppor

Discussion in 'Accounting, Tax & Legal' started by Nigel Ward, 16th Jun, 2006.

  1. Nigel Ward

    Nigel Ward Team InvestEd

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    Poor old Mr Tabone. He was renting his home from his unit trust and the ATO disallowed his deductions. It went to the Adminstrative Appeals Tribunal and he largely lost.

    The case is not authority for the general proposition that in all cases you can't do what he tried to do (altho I must say I'm not yet convinced you can). What it does show is all the things NOT to do if you want to go down this path. See how many things you can spot that Mr Tabone got pulled up on. :)

    Of course detailed legal and tax advice should be obtained if you're thinking about anything like this.

    Cheers
    N.
     

    Attached Files:

  2. capitalist

    capitalist Member

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    Thanks Nigel,

    This document goes straight on my top shelf.
    Explanations and interpretations of the Mr Tabone situations are priceless.
    Now I'm fully confident that I can assume my PPOR as one of my IPs.

    Regards
     
  3. Dave

    Dave Well-Known Member

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    There are some accountants on somersoft who recommend a similar strategy, except with a discretionary trust. Is that difference really a whole different outcome?
     
  4. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    Yup - a unit trust is quite a different beast to a discretionary trust.
     
  5. Nigel Ward

    Nigel Ward Team InvestEd

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    On that point check out the glossary for descriptions of discretionary trusts and unit trusts. (Sim are those live yet? :D )

    N.
     
  6. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    Oops ... now they are: Discretionary Trust - Unit Trust