"Give" my money away to my wife to invest in shares

[arruga]

Hi
My wife doesn't have any income....Can she by shares on her name with my money (that I give to her) so the profit she makes is taxed within her income range (will be below threshold) ? or that profit adds up to my income as it was my money to begin with ? If she indeed can, does she need a separate bank account ? can she by shares from a joint account (mine and hers)? what's the legal efficient way to go about this ?
cheers

 

[prawn_86]

Re: "Give"my money away to my wife to invest in shares

Hi Amourgues,

Judging by the amount of threads you have started, you should really be talking to an accountant.

Please note that due to the laws here in Aus ASF members are not legally allowed to give financial advise only hypothetical situations. If you do need advice please contact a licensed professional

Thanks

 

[Knobby22]

Re: "Give"my money away to my wife to invest in shares

It's not your money, it's both your money. So even if you keep it all she gets half (if not more if you divorce).

I am doing that. If you have the shares, cash, bonds etc. in your wife's name you will pay way less capital gains tax and also save tax on interest and dividends.

But you really should see an accountant - urgently.

 

[tech/a]

Re: "Give"my money away to my wife to invest in shares

Save yourself a lot of work.
Simply claim your losses against your income.
And there will be losses!

 

[Knobby22]

Re: "Give"my money away to my wife to invest in shares

Save yourself a lot of work.
Simply claim your losses against your income.
And there will be losses!

True! Maybe operate in both your names, I did that for years and it worked out OK.

 

[arruga]

Re: "Give"my money away to my wife to invest in shares

Hi Amourgues,

Judging by the amount of threads you have started, you should really be talking to an accountant.

Please note that due to the laws here in Aus ASF members are not legally allowed to give financial advise only hypothetical situations. If you do need advice please contact a licensed professional

Thanks

Will do....want to clear out a few things first...I believe this question is quite general though (and not seeking specific advice)....if your wife makes a profit with money you gave to her.....is that her income or your income, for tax-pruposes ?

 

[arruga]

Re: "Give"my money away to my wife to invest in shares

True! Maybe operate in both your names, I did that for years and it worked out OK.

interesting...you mean, shares under the name of us both...does this need a joint account or this doesn't really matter ?....so you're saying that the shares that made a profit can be taxed under her income and the ones that made a loss can be climed against my income ?

 

[burglar]

Re: "Give"my money away to my wife to invest in shares

interesting...you mean, shares under the name of us both...does this need a joint account or this doesn't really matter ?....so you're saying that the shares that made a profit can be taxed under her income and the ones that made a loss can be climed against my income ?

Don't be so quick to get mixed up.

If in both names you calculate net profit (loss) you get half each. For better or for worse!

 

[Bill M]

Re: "Give"my money away to my wife to invest in shares

As far as I know you can donate what you like to your wife, then it becomes her money.

Then if she gets dividends, capital gains or losses it is her investment and her responsibility to deal with it tax wise.

It is called income splitting, well that's what it was called years ago.

I try to do a 50/50 split with my wife and myself for investments and income.

This way we can both make 18k tax free each year and 36k total for a couple of retirees is a pretty good salary.

All my opinion, check all facts and this is not a recommendation. I'm just telling you what I do legally, cheers.

 

[arruga]

Re: "Give"my money away to my wife to invest in shares

As far as I know you can donate what you like to your wife, then it becomes her money.

Then if she gets dividends, capital gains or losses it is her investment and her responsibility to deal with it tax wise.

It is called income splitting, well that's what it was called years ago.

Thanks Bill. That was exactly my question. And yes, it still called income splitting...just looked it up. Cheers

 

[ROE]

Re: "Give"my money away to my wife to invest in shares

you can buy investment under her name
open a broker account with her name, TFN etc...

legally if it is under her name then it is her ...

tax, dividend, capital gain will all be under her tax bracket..

When your kids reach 18 and you have a few of these you can do the same
can be a good tax effective strategy ...

The other options is Hybrid Discretionary Trust

 

[Klogg]

Re: "Give"my money away to my wife to invest in shares

The other options is Hybrid Discretionary Trust

This is what I've done and probably the cleanest way... but also expensive to start (~1.5 - 2k through an accountant if you got for a corporate trustee) - and you need to understand:

- Whether or not you go for a Corporate Trustee
- Where you'd allocate dividends/imputation credits
- If the amount you're investing is worth creating a trust for
- If your personal income tax is high enough to warrant going to all the trouble
- What else you plan to hold in the trust (e.g. your family home and you 'rent' it)
- How long will it be before your wife's tax will catch yours (and does this mean you add a holding company as a listed beneficiary to pay a flat 30%)

As others have mentioned, definitely get financial advice from someone qualified and make sure you understand the ins and outs before doing anything, as making the wrong move structurally is costly.

 

[So_Cynical]

Re: "Give"my money away to my wife to invest in shares

I believe this question is quite general though (and not seeking specific advice)....if your wife makes a profit with money you gave to her.....is that her income or your income, for tax-pruposes ?

Its her money and she pays the tax.. that's the way i see it, and as you have "given" her the money i doubt the ATO could see it any other way.

im not an accountant.

 

[skc]

A bit of a tangent...

Some countries assess tax on husband and wife on a combined basis which I think is an excellent idea.

So a single working husband earning $100k (paying ~$25k tax) is not worse off than a couple earning $50k each (paying $7.8k each). As the family income is the same, there's no reason why the former should pay $10k more in tax. So you end up with people doing all sorts of structures to get around it.