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  1. #11
    Join Date
    Jul 2010
    Location
    Auckland City, why invest else where?
    Posts
    984

    Default

    Been there done that, we got a "mortgage free" home with the mortgage transferred to LTC, on the advice from our accountant as well.

  2. #12
    Join Date
    May 2013
    Location
    Auckland
    Posts
    177

    Default

    Good work Nov, sounds like you had a good accountant.
    Tax and trust lawyer

  3. #13

    Default

    Doesn't this step into 'financial advice' though?

  4. #14
    Join Date
    May 2013
    Location
    Auckland
    Posts
    177

    Default

    If a financial advisor is giving you tax advice, I would be more concerned than if it was the other way round!!

    But in all seriousness I don't see at all how this should be in the domain of a financial advisor. A financial advisor wouldn't have a chance of picking up on or recommending this as they would have no idea of the tax benefits involved as they are not trained in tax (or at least can't advise on it in any more than broad terms in relation to investments).
    Tax and trust lawyer

  5. #15
    Join Date
    Jul 2010
    Location
    Auckland City, why invest else where?
    Posts
    984

    Default

    Sometimes an accountant can also become an AFA.

    But normally you would expect an accountant to give accounting or tax advise.

    So it really depends on the background of the financial adviser.

  6. #16
    Join Date
    Feb 2013
    Posts
    240

    Default

    Found this old post .Scenario - LTC shares will be sold to a trust. Trust will have 2 original shareholders mum and dad and 2 children 19 and 12 yrs as beneficiaries . If the Trust charges interests to LTC for loan (hence income is received into trust), then trust distributes the income to the beneficiaries, (1) does the income needs to be allocated back only to the original shareholders or (2) can it be distributed say to the 19 year old.

    In other words , is there a tax rate differential advantage aside from other known trust benefits?.
    Last edited by BlueSky; 11-01-2017 at 11:25 PM. Reason: spelling

  7. #17
    Join Date
    Oct 2013
    Posts
    1,385

    Default

    Subject to restrictions in the Trust Deed, a trust can distribute income to any beneficiary. This is a big tax benefit of trusts, and is well known.

    But there would be no income to distribute in the case you describe - trust charges LTCinterest, generating income for trust, but LTC pays interest and passes this loss on to shareholders (the trust) negating said income.
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