Re lending on future value. I cannot count how many people have asked me to lend say 100% of a project because it will be worth more on completion. There are not too many business transactions outside of property either that allow you to take your profits, or offer them as security before you’ve made / earned them.

Banks often revalue property on…[Read more]

To clarify the banks position. Let’s assume you own land outright and want to spend 250k to build – borrow 200k (irrelivant if the land is worth 300k or $1.0M).

You will need to put your 50k in first – either to the builder or into bank, so the bank knows between you and them there is 250k to complete construction. It is extremtly common for…[Read more]

Link does not work. Try this one:

http://www.courts.qld.gov.au/esearching/filedetails.asp?FileNumber=4774%2F09&Court=Supreme&Location=BRISB

Of course the can ask salary. The privacy statements allows them to collect any information to assist with assessing the application. it is a breach of the privacy laws only if they ask non-related information.

Refer example above ( I wrote one yesterday) for an example of short term crossing. You do this by limiting the cross-collateralisation to 1 of the contracts / loans. When that contract is paid / refinanced the balance of debt is uncrossed.

Excuse my spelling. Had to write a long one on iPhone…

Dan42 – that doesn’t suprise me – there are always reasons / times you are better not to cross. I often avoid crossing for a lot of clients.
You also saw my other post re trusts not always providing the protection people think.

I’ve just crossed 5 properties for a client buying in a trust. The reason was this:

4 existing properties all with…[Read more]

Would you go a step further and support the mortgage with some form of loan contract. This could put a dollar amount on the father’s interest. A mortgage lodged by itself would have NIL monitory value?

Hi Terry, Thanks for the info. I'd like to explore a bit more in to this though.One of the links you provided relates to a case where a 'Dr Ward' left a property in her will to a women who would 'mind her cats'. The problem is the asset was not owned by Dr Ward but rather it  was owned by a trust. Also note that Dr Ward was not listed as an in…[Read more]

Ok so if you lend money to you trust you have a problem – this will effect the asset protection for most trusts for people on this site.

Have you read about the ASIC ruling on matter of Richstar?

Google it : it appears that if one ofthe beneficiaries is the trustee or director of the trustee – the assets of the trust ar no longer protected.…[Read more]

Dan42 wrote:

Banker wrote:
Point 1: individual goes belly up. Bankrupt. The courts seize their assets and the balance sheet of the trust shows the trust owes the individual say 200k. A creditor, bank or liquidator can claim against that asset. This could be reassigned to the creditor. Now the trust owes the creditor 200k. As mentioned above -…[Read more]

Maybe later. I have to go to an appointment. But try this. New Trust is established. Balance Sheet of the Trust shows NIL assets and NIL DebtBeneficiaries lend the trust 200k Balance sheet now shows: Asset – Cash 200k. Debt to beneficiary 200kIn accounting a balance sheet gets its name because assets and liabilities always balanceNow the trust…[Read more]

Dan42 wrote:
Firstly, Plan B is not different. It's a trust with a company as trustee. It is holding the business / investment assets.Point one – sure, but if the money has been paid out, then the individual goes belly-up, then whats the difference? In the end, the individual is left with nothing, and the trust has paid the money out. What IS…[Read more]

Some buyers put caveats on properties when a depoist is paid – usually larger transactions. They can do this because they have paid a deposit and therefore have a financial interest in the property. For the transfer to take place at settlement, the caveat usually needs to be lifted and then put on again after settlement.

The banks do not actually…[Read more]

Buy the way. Customers with strong assets can use property outside the trust to secured debt in the trust.

E.g. Loan in the trust name- guaranteed by people on title. Very different to lending money to your trust yourself

By giving the trust a large LOC say from NAB. It can draw from the LOC to pay distributions in full. This avoids beneficiary…[Read more]

Dan42 wrote:
Sure, a trust won't protect you if a guarantee is taken by the bank. That is a given.I disagree that the trust property is at risk if the individuals are sued, in most circumstances. If there has been some transfer of assets to the trust, for the main purpose of hiding the asset, then the trust structure probably won't work. This is…[Read more]

You need to think about who is going to sue you. If a company is trading – let’s say a builder. Trading through a family trust allows you to distribute your profits. If you buy assets in a seperate entity then the trust owns nothing and retains no income. This does protect assets but mainly due to distributing the profit away to different entities…[Read more]

To prepay interest most banks will need you to have a fixed rate – so they know what to charge for 12 month interest. I dont know who would do 6 month. Usually min 12z

If your loan is interest only and you pay 6 months worth of repayments- the balance of the loan will drop. Therefore you have just made a payment off the priciple which is not deductable. You need the interest to be charged so it appears in your statement e.g. If you have a loan of 300k fixed at 7% they will charge a one off interest charge of…[Read more]

Make sure you are prepaying interest – not simply repayments in advance.

Generally you will need a fixed rate so the bank can calculate the exact interest charge for 12 months. You can not really claim for whilst the property is PPOR. If you claim the full amount you may find yourself having to make an adjustment to your return.