澳洲Australia property Arms length? | Sydney


在澳大利亚 I have been looking at units in Sydneys upper North Shore. Only in Ku-Ring-gai so up to Wahroonga. The area seems to offer good fundamentals, is very popular and in general seems to be a lovely place. My favoured location to buy I think is G Appologies for all the threads, I dont have much time to get organised before the auction on Saturday. I had a question about the solicitor/conveyancing fees. I remember last time I had this done it cost over $1000. But that was soliciting t


Hi All,

Just wondering if some knowledgeable person could explain the term *at arms length* in regard to trusts?

Been doing some reading re setting up a DT and have seen this term used fairly often - but have been unable to find an exact explanation of it.

ciao

Nor  

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arm's length transaction
Definition

A transaction between two related or affiliated parties that is conducted as if they were unrelated, so that there is no question of a conflict of interest. Or sometimes, a transaction between two otherwise unrelated or affiliated parties.  

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Hi Splade,

Thanks for providing that.

The definition I can understand, but as for the actual interpretation and applications.........:confused:

I guess some more reading is in order.

Maybe someone could comment on this example.

A beneficiary of a DT rents an IP owned by the same trust of which he is beneficiary. Under what circumstances can that be considered to be an arms length transaction, if at all?

ciao

Nor  

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Norwester said: ↑
Hi Splade,

Thanks for providing that.

The definition I can understand, but as for the actual interpretation and applications.........:confused:

I guess some more reading is in order.

Maybe someone could comment on this example.

A beneficiary of a DT rents an IP owned by the same trust of which he is beneficiary. Under what circumstances can that be considered to be an arms length transaction, if at all?

ciao

NorClick to expand...
it's subjective, but if it's deemed by ATO that the purpose of renting is for tax reduction purpose, rather than genuine income producing purpose, then it's considered as "at arm's length transaction"  

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http://www.google.com.au arms length transaction
The first links in the answers above may provide some helpful discussions  

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Norwester said: ↑
Maybe someone could comment on this example.

A beneficiary of a DT rents an IP owned by the same trust of which he is beneficiary. Under what circumstances can that be considered to be an arms length transaction, if at all?

ciao

NorClick to expand...
I'm not an accountant, but I will give this a go. There has been talk about this same issue a couple of times & the consensis is that if you have several IP's held in the same Trust, you are likely to be treated more fairly than if this is your only one & you are essentially renting it from yourself unless, of course, if you are in an occupation where there is a likelihood of litigation whereby you use the Trust for asset protection.

Onto the question of making it an arms length transaction. You could get an appraisal from a PM as to the amount of rent payable, maybe even get them to manage it for you as you would any other IP.  

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