How does land tax apply to discretionary trusts?

There are many advantages when it comes to purchasing investment properties through family discretionary trusts, but one must consider the ins and outs of the land tax threshold and how this would affect them in the long term.

Advisors often recommend property investors to buy property in a family discretionary trust with the main advantages of a discretionary trust being:

• Possible asset protection using a corporate trustee;
• The ability to minimise income tax when distributing profits each year to beneficiaries of the discretionary trust;
• The ability to minimise capital gains tax when distributing any capital gains to beneficiaries to minimise tax on the capital gain made on the sale of the property; and,