Hi All
We had a family home that was owned by the family trust for 10 years and then 3 year ago the trust bought a section and built a new family home. The build was messy with the builders going bust and it was stressful. Eventually we moved into house 2 about 18 months ago while the build was still being complete.
At the time it was just easier to rent out House 1 (failed to sell) without moving it to a look through company.
Q1 If we sell House 1 now will the trust need to pay any tax on it since technically the trust owned it for 10 years.i.e. is it subject to bright line rules since it is technically a rental fro the last 18 months?
Q2 If the rent is just covering the mortgage (breaking even) can the trust just continue to hold the property (in the hope of realising the capital gains later)?
Q3. If there are minimal losses (given that there is now ring fences) can I just leave them to stock pile in the trust.
Thank you.
We had a family home that was owned by the family trust for 10 years and then 3 year ago the trust bought a section and built a new family home. The build was messy with the builders going bust and it was stressful. Eventually we moved into house 2 about 18 months ago while the build was still being complete.
At the time it was just easier to rent out House 1 (failed to sell) without moving it to a look through company.
Q1 If we sell House 1 now will the trust need to pay any tax on it since technically the trust owned it for 10 years.i.e. is it subject to bright line rules since it is technically a rental fro the last 18 months?
Q2 If the rent is just covering the mortgage (breaking even) can the trust just continue to hold the property (in the hope of realising the capital gains later)?
Q3. If there are minimal losses (given that there is now ring fences) can I just leave them to stock pile in the trust.
Thank you.
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