Here is a link to an article re this
http://www.smh.com.au/business/negative-gearing-unhealthy-says-anz-boss-20110602-1fiz8.html

You could do that but it would be messy (tax) unless you had a separate loan account split up.

This is because you will be borrowing for investment purposes and mixing this with you non deductible loan. Only part of the interest would be deductible. This is ok and can be worked out, but every subsequent repayment to your home loan will come off…[Read more]

1. Yes you can lend to your trust. The trust can pay you back out of the profit, but this would not reduce the income of the trust, just like you paying $1000 off your ANZ loan would not reduce your income by $1000.

There is no need to charge your trust interest, but if you are borrowing from a lender and then lending to your trust your trust…[Read more]

Usually the trust deed will cover what happens. Often there are back up appointors named. If the deed is silent then you would probably need to amend the deed and this usually wouldnt cause a resettlement.

Thanks Michael

That is great then, very flexible. But I woudn't advise on using a LOC for the main loan, only to access equity for further investments. I guess the offset could come in handy for someone who has paid off their non-deductible debt and has some spare cash lying around.what about the ANZ one. It appears to be an all in one thing.

hi EWUsing a trust would definitely be slower and cost you more in the initial stages. Unless the trust had other income and it could therefore negative gear. If no other income then it would just have losses which would be carried forward, but would not result in any immediate tax savings. $500 pw is a large short fall.Using a trust in NSW means…[Read more]

MichaelThe NAB one does appear to be a LOC with the offset option, but is it really an offset account of just a redraw facility?

emptyvessel wrote:
Ahh, but if I had a DT, i wouldn't get the negative gearing and thus no positive cashflow. (Of course, I could borrow and then lend money to the trust, but I haven't found someone that can walk me through how this looks in 5,10,15 years.)And HDT's appear to be a minefield for tax and bank lending.I can only see a trust making…[Read more]

HI MichaelAre these ANZ/NAB LOCs and offset accounts completely separate, ie different account numbers for each?

What you say sounds reasonable to me. Keep it t arms length and commercial rates. make sure you run it by your accountant first though.If only you had used a discretionary trust!

Is your wife a joint owner of the property?

Yeah, that guy really did go over board didn't he!

Builders Of Most Expensive House On Sydney Harbour Go To War In Indonesiahttp://www.andrew-drummond.com/view-story.php?sid=404

If your wife owns the properites with you it may be hard to her to pay herself!Even if the wife doesn't own any properties with you it may not be possible to pay her.see a recent case, Brown and Commissioner of Taxation [2010] AATA 829, http://www.austlii.edu.au/au/cases/cth/AATA/2010/829.html Allan Brown (“the taxpayer”) was the owner of a ren…[Read more]

What Anthony says is true, but Tax is covered by Commonwealth Legislation such as the Income Tax Assessment Acts 1936 and 1997. This means the definition of spouse in this Act is the one to go by for tax reasons, :http://www.austlii.edu.au/au/legis/cth/consol_act/itaa1997240/s995.1.html#spouse"spouse" of an individual includes:…[Read more]

Just remember investment loans are tax deductible, private loans are not. Deductibility depends on what the borrowed funds are used for.So your aim should be to pay off a private loan first, and then start on paying down an investment loan after that.

I dont' think Steve bought in a rural area. But residential areas in large regional towns.

wade anthony wrote:
Thanks for your thoughts, the theory behind the madness was to have the additional income coming in. Say if the rent would return approx. $180 p/w would the the return on the interest/tax be a better? I am open to suggestions if anyone has any.

What about if you wanted to buy a house to live in later? You would have money…[Read more]

Why pay off an investment loan ? This will mean you have a higher loan on your main residence and will pay higher interet which will not be claimable.