The Main Residence Trust (MRT) provides at risk individuals with the opportunity to better protect their home from potential creditors without losing the benefit of the main residence CGT exemption or attracting bankruptcy clawbacks.

The MRT is a special purpose trust under which the at risk individualis granted a legal interest in the home which is sufficient to attract the application of the main residence CGT exemption. If the home is sold in the future, the sale can be structured so that the CGT exemption can be indirectly applied.

Provided the trust is appropriately structured, the trust assets (including the home) should not be available to satisfy the debts of any beneficiary.

ADVANTAGES

• When appropriately structured, legal ownership of the property by the trustee of the MRT achieves better asset protection than personal ownership.
• The main residence CGT exemption may be applied indirectly upon the sale of the home.

OTHER CONSIDERATIONS

• There are several situations where the MRT will not be an appropriate solution. It is a personalised strategy – not an off-the-shelf product.
• Eligibility criteria must be assessed in each case in light of the individual’s circumstances.
• Alternative strategies may be available which provide similar or superior outcomes and specific advice is recommended.

Should you wish to discuss the above issues in further detail or would like an estimate of the fees to implement the MRT solution, please contact Marsh Tincknell on 07 3422 8000 or info@mtaccountants.com.au.

You can also find the main residence and trust fact sheet PDF here.