Lenders will require personal guarantees for any company or trust loan. They don't care that the company has no assets because the director or the trustee will personally liable. In fact some banks wouldn't lend money for a housing loan to a company that is trading.I am not sure about the builder's licence bit, but I would suspect the licence…[Read more]

Generally loans revert to PI after the IO period expires. So if you have a 30 year loan with 10 years of IO it will be 20 years PI after year 10. Some banks may offer you to extend the IO period, others will make you supply new payslips etc (ANZ).

Very good PaulDid you know that trust assets generally no not form part of the estate of the individual on death, but in NSW under the succession Act there is a section where trust assets can be held for form part of the notional estate of the individual. Then under the Family Provision sections of the Succession Act ex spouse are classed as…[Read more]

hi Vesali

Yes, you should never own assets in a trading business and never have too many eggs in the one basket. If you were running a business then the safest thing would be to have one company trade and another company own all the assets such as tables and chairs, computers, photocopiers and then another company supply the staff.

But if you…[Read more]

Sounds like a good decisiion.

Running a business is not easy, extremely risky and very stressful

The 2 companies are separate legal entities. As such they are generally not affected by each other unless there are transactions between the 2 which involve unfairness or less than market value transfers etc.

I think you will find it harder to negotiate because you are dealing, not with the owner, but with the bank. They cannot negotiate below market price or they could be liable to the owner for the shortfall. They could negotiate on conditions, but because you are dealing with a bureaucratic organisation it is hard to arrange.

I don’t know enough about super to comment. But there are many things to consider and you should probably go and get a 2nd and 3rd opinion from a special SMSF advisor.

hi Mark

Assets in a discretionary trust may be safe if you go bankrupt. But this will depend on how the trust is set up and how it is used.

If you get divorced then generally having a trust will not assist.

You will probably need to re-jig the finance, but if you have been approved before then you should be approved with the trust.

Trusts can…[Read more]

Hi Paul

With this there are at least 2 aspects of asset protection.
1. You as an individual were be sued and to go bankrupt.
2. The owner of the property is sued.

When an individual goes bankrupt assets held as trustee for another person do not form part of your estate. Also an interest in a discretionary trust is not considered property and…[Read more]

Yep, i was thinking of mortgage managers non authorised deposit taking institutions.

in Sydney?

for the tax side see http://www.strategicwealth.com.au/

I would be scared of putting my money in that FH savers account. It is locked away.

Hi SR

I just read the whole thread now.

What you have done is increase an existing loan. You will the use part of the loan to invest and will result in a mixed loan. There is nothing wrong with this and the interest will be deductible. If you have a $400,000 loan with $100,000 used for investment then 1/4 of the interest would be…[Read more]

Paul,

Where are you located?

If you qualify as spouses and the property is located in VIC then you may be able to transfer it to your boyfriend without stamp duty and without CGT as it is your main residence.

Your boyfriend could borrow 105% to buy it off you are market rates and this would free up a large amount of cash which could then be used to buy the new house. Net…[Read more]

Technically trusts should hurt the ability to borrow.

Imagine you had a discretionary trust with $100,000 pa income and you were on a wage. The trustee of a discretionary trust as absolute discretion on who to pass this income to. So there is no guarantee that the income would come to you. Even if you are trustee there is still no guarantee you…[Read more]

auhealth wrote:
Michael,Thank you for the explanation. Now I can see the problem. So if the loan is interest only, and as you guys suggested, never pay extra into the loan. the extra money will alway goes to the offset account, is it still accaptable to claim 1/4 of the interest paid for the whole loan tax deductible in ATO's view?Another one…[Read more]

Depends on your risk tolerance.

What about shares/? they are still low and returning good yields. banks shares are returning aroun 7% before franking credits. lots of up potential

avoid the non banks non building societies!