Transferring shares to a trust

Apologies if this is the wrong forum or has been covered before, but I can't find it.

What is the process to transfer shares owned in my name to that of a family trust?
Is this known as an "off market transfer"?
Do I fill out an "Australian Standard Transfer Form"? This form doesn't seem to make allowance for a trust (or trustee) as transferee?

Cheers

 

Hi ILoveProperty,

The white off market form is the correct form to use. You can sign as the trustee of the trust and probably best to add some documentation advising that you are the trustee of the family trust.

Cheers,

Dan

PS Not sure about the implications of AML/CTF. Maybe read here http://www.linkmarketservices.com.a...ent Anti Money Laundering_Investor_300908.pdf

 

Many thanks Dan

And had never seen the anti-terrorism form before. Classic.

 

Hi ILoveProperty,

AML/CTF came in around 12th December 2007 for advisers.

Cheers,

Dan

 

Follow up question.

Say I have a loan for $50k, and own shares with a market value of $50k.
I want to transfer all of these shares to a trust.

Is there any way to transfer the shares, keep the existing loan, and have the trust pay the interest using the dividends?

Can this be covered off in minutes?

Or do I need to get a new $50k loan, then on-loan that to the trust and the trust buys the $50K shares off me, and I then pay out my initial $50k loan?

 

Yeah. Fun stuff this.

You can use income generated from the shares to help pay the interest on the loan. This is simply a cash movement and nothing to do with tax deductibility.

Talk to your bank and see if they will re-organise the loan so it is in the name of the trust - but no doubt they will still have you as a guarantor and the same security etc

If the loan is in you personal name and you receive income from the trust, the interest cannot be deductible against that income. This only works with fixed/unit trusts - not ye old family trust.

You could do another private loan agreement between yourself and the trust - so the trust pays the interest to you (say $4000/yr) - which you declare as income, and then you claim a deduction for the same amount. This effectively puts the deduction for the interest in the trust to offset against the income.

However this should only ever be used as a short term solution and it is better to see your lender and have it all in the correct name from the start. If they won't do it, see a lender who will.

I assume the dividends earned will be less than the income, so you will loose all the juicy tax benefits if you move it all to the trust. However the trust is still pretty good for asset protection and splitting future income and capital gains etc.

 

Thanks Superman, some food for thought there.

When I started looking into this, the value of my shares matched the value of my loan. Now the shares are a good bit up. So would pay capital gains on the transfer, so not as keen to do this.

I would have actually preferred that the shares were down so I could claim a loss to offset other gains from this financial year. Can't have everything I guess.

Also the shares are positively geared - which also lead me to think it was time for a trust.

Will just have to keep weighing it all up...