Trust - gifting

[Bean]

For the purpose of delaying putting my house into a Trust, and yet to start gifting, could I gift money to the Trust and&nbsp;then&nbsp;take loans from the Trust, so that I am in debt to it. I can repay the debt by selling my house to the Trust, when I want to transfer the house into it. I would already have started gifting, and due to the debt I would be ahead with gifting the house before I transfer it. If I want to protect the house at all, the Trust would already have a claim. Would that work? What would the downsides be? Would there be any problem with my being in debt to the Trust? The purpose of a Trust is to manage assets on behalf of the beneficiaries of the Trust, is there a problem that its asset is money loaned out?<BR><BR>Note: For why I might want to delay putting the house into a trust see thread: Offsetting rental loss - advantage of not having house in trust?<BR>

[Rosco]

Hi Bean,

Sorry, probably a dumb question but what is nbsp.

There is no more gift duty, so you could gift the whole lot in one go anyway. There is other factors to consider apart from gift duty which has been discussed in lots of threads on property talk.

Is this your personal house or rental?

From my understanding of your post, you want to loan money into the Trust, then tax it back as a loan. So really the two loans would offset, and the balance would be zero. So this wouldn't really achieve what you are after.
You could just loan money to the Trust, then when it buys the property, it could use this cash to pay for some of it.

Ross

[Keys]

Hi Bean,

Sorry, probably a dumb question but what is nbsp.

That will be something to do with formatting which has not come out in the post. Bold for example. Or underline

Keys.

[Bean]

Yes, nbsp must be a format error, but "not buying some property" would almost fit the meaning!

I mean, I want to gift money into the Trust, not loan it to the Trust, and then I want to take it out as loans to me from the Trust, so that I start gifting without transferring the house. I am aware that there is no longer gift duty, but there are other advantages as discussed in other threads. they probably dont affect me though. My concern is, if I gift the money into the Trust, whether all at once or over time, intending in the long term to sell the House to the Trust, is there a disadvantage in getting in to debt to the Trust? Usually Trusts owe people money not the other way around.

[Perry]

FYI
&nbsp; is [x]html code for non-breaking space.

Probably come across with a copy and paste
from a word-processing program like Word.

Copy and paste it into Notepad, (which gets
rid of all the hidden code garbage) then copy
it from there and into a PT post composition
window and all should be well.