Anthony K wrote:
Hi TerryW and All,Yes the 6 years CGT treatmewnt is correct.Trustee duties can be found in 2 places, in the specific trust deed or any amendments and where that is silent or ambiguous. in the Trustee Act for each State or Territory.

Hi AnthonyAnd don't forget the common law duties and also the Corporations Act if the trustee is…[Read more]

If you use one bank then they have control over both properties. If something goes wrong they may keep money from the sale of the first property to reduce the loan on the second – even if the loans are not cross collateralised. They will also know intimate details about your situation. Spreading the loans helps compartmentalise your secrets!

A call option is one which gives you the right, but not obligation, to buy something.A put option is one which gives you an obligation to sell if the other party exercises their option.These used to be used as a way of locking someone into a purchase, but giving them the ability to onsell without have to pay stamp duty, by assigning their option…[Read more]

Companies are separate legal entities separate to shareholders and directors. Directors can only be pursued in limited circumstances. Of course if anyone provides a personal guarantee then they can be pursued in relation to that, but not other company debt.If you have your wife as director and the company is sued and the creditors are able to come…[Read more]

Desertchik wrote:
We have 2 IP properties which are currently owned in one partner's name and we would like to place them in our Discretionary Property Trust.  I understand this can be done but not sure the best way to go about doing this.  The reason we'd like to include them in the Trust is to build our Trust equity base for further b…[Read more]

There are a number of issues to consider.1. You can rent out your main residence for u to 6 years and still claim it as your main residence. However, if you are not earning an income from it then it can remain as your main residence indefinitely. see s118-145(3) ITAA…[Read more]

APerry wrote:
There has to be net income to distribute before it can be used. As this is unlikely at first and there seem to be no current beneficiaries it is pretty debatable whether a structure is warrented or not. I wouldn't bother, I'd ratgher use the short term tax benefits and savings on expenses, but can also see why some people would…[Read more]

Putting it in redraw would mean paying down the loan. When you withdraw it the interest may not be deductible if you use the funds for private expenses.

Aqeel wrote:
Thanks everyone!Qlds007 you have mentioned that …"negative gearing cannot be cliamed and is closeted within the Trust".What does this mean? That negative gearing is not an option?Cheers!

A trust is a separate tax payer. So if there is a loss it cannot be offset against your personal income.

APerry wrote:

Aqeel wrote:
I am qualified engineer and has got a new job in mines ($ is twice as what I was earning last year).I do own my first house which I brought in 2009.If I want to buy as many investment properties by myself (quick) and safe. What structure would be best? Bcos from Steve's book I see that 'family trust' has…1. Asset…[Read more]

JacM wrote:
Right okay.  Damn I wish someone in the know had pulled me aside when I bought the house and said for gods sake luv, interest only with offset.  None of this principal and interest business nooooooo.Thanks Terry. 

Don't worry too much Jac, we all make mistakes. I have made plenty.Just remember to try to learn from the mistakes of ot…[Read more]

JacM wrote:
@Dan: yep I could remain in my current residence for another year or two, but keen to move at or before the two year mark.@Terry: indeed.  I have done those sums and the sums say sell   I hate that.  I like the rule of never sell.  Such a waste of stamp duty, legals and selling fees!  I was kind of hopeful someone would spring up wi…[Read more]

You generally cannot nominate someone else without stamp duty being paid again – unless, perhaps, if you have a written agreement before the first contract was signed.

Trusts are great for a number of reasons. One not many people think of is the ability to include outsiders in servicing calculations if you suddenly find you cannot get finance. eg If you bought land in your own name then later couldn't get finance to build you are pretty much stuck. But if you had a company as trustee for a trust you could easily…[Read more]

I think it would often work out better if you sold. Unless, maybe, you had large sums of cash to use to purchase the new one.Do some sums and see:How much tax you will pay on the rent of the old one, andHow much non deductible interest you will pay on the new one.And then compare this to the sums as if you had sold the old one.

nadaimee wrote:
Hi All,I am hoping someone out there can provide me with some ideas on how to structure myself. I am financial enough to buy-renovate-hold 2 properties. I am only interested in doing quick turnaround cosmetic renovations and then rent-out for a minimum 12 months to reduce GST, then re-value and decide on whether to keep or sell…[Read more]

eg if the balance of the card was $1000 and you had used $204.95 of this for investment, then this means 20.94% of the card is investment related. So when you borrow $204.95 from your LOC and pay it into the credit card then only 20.94% of this will come off the investment portion. However, assuming you pay the card off in full each month, then it…[Read more]

Well, actually it depends on the type of trust. I had assumed it was discretionary.But if you are using a unit trust it may be possible to claim a deduction, in personal income, for a loan used to buy units.

The trouble will arise if you are paying personal expenses with the credit card as well. Once you do that it will be one big loan without the possibility of separating deductible and non deductible portions. So if you then refinance this loan with a new loan from the credit card only part of it could be attributed to the investment portion.Its…[Read more]

Just think it thru clearly step by step.Firstly you and the trust are separate people for tax purposes, say you = A, trust = BNow if A borrows money and gifts it to B. There interest would not be deductible for A as you cannot claim interest on a gift.If A borrows and then lends to B. A will be charged interest by the bank. If A then charges B…[Read more]