1. You could purchase out your spouse, making sure it is for commercial reasons and not tax reasons. If you borrow to do this and the property becomes a rental then the interest may be deductible2. There is a 6 year rule which may enable your property to be CGT exempt while you rent it, but it won't apply if you have another main residence at the…[Read more]

The trustee of the trust is the legal owner of its assets. All legal documents will be in the trustee's name, so what will happen is the title will be in the name of the company and the loan will be in the name of the company or the company as trustee of XX trust. Since the trust and the company have no real substance, any lender will need…[Read more]

If directors of a company receive a distribution from the trust then it has nothing to do with the company. That is a separate position they hold. They will pay tax on their marginal rates. If the trustee distributes to the company, then it still doesn't concern them as individuals. The company will pay tax at its marginal rate or pay a pre-tax…[Read more]

Adrian13 wrote:
Hi Terry,If I set up a trust ahow does the $2 company come into it.Is it the following:1. Trust2. Company – Trustee3. Directors of the company the beneficiaries???

It could be the trustee or a beneficiary. The directors can also be separate beneficiaries.

The deed may be good, but do you know how to use it? who to put in what roles etc

The bank will have to do their own valuation – maybe they just wanted you to get an estimate so you have something to work on. No use in submitting a loan if your valuation will come in way lower than expected.

It all depends on how much spare cash you have lying around. Having two people involved may also complicate things as the offset will be in the same names as the loan.Also, if you have a non deductible loan -eg on your home, you would be better off putting all cash into an offset on that loan as this will save you non-deductible interest.

I think you should probably try your luck with asking the agent for compensation. If they refuse then not sure what else you could do.I have just seen a case where the purchaser had arranged to move in on settlement day, but the tenant had not moved out, and refused to move out because they hadn't found somewhere to move into. They are being taken…[Read more]

its a tough one and happens all the time. Was it a condition on the contract of sale? If so you could refuse to settle until they are out. It will help you save some interest, but doesn't help with your plans and time.

Yes, if the trust pays interest to the Whites, then it is income to them, and an expense to the trust.

Someone advised you to sell only to buy another? What about the CGT, legals, commission on the sale and stamp duty, legals, bank fees on the new purchase. This could amount to a fortune

Yes, there are many disadvantages of discretionary trusts owning real property, especially in NSW, and in the early stages.

yes, i think so

And it depends on the bank too, St G in particular are different. One of their offsets actually reduces the principle, even on IO loans.

Yes, i think so because the requirement is that someone is eligible if they have never owned an owner occupied house before.

There would only be one type of trust that you would consider – discretionary. This provides greatest asset protection and tax effectiveness. Costs $100 to $10,000 to set up.

1. yes2. broker3. broker4. yes

I would stay clear of hybrid trusts. Look at discretionary trusts as these offer the greatest asset protection and great tax flexibilities. Just be aware of the drawbacks – losses cannot offset personal income and probably more land tax would be payable.Banks generally don't like hybrid trusts, especially where the borrower is not the legal owner…[Read more]

you could get yourself into all sorts of trouble by doing it yourself.Do you understand all the roles of those in the trust? What the effect of naming someone makes?The consequences of getting it wrong can be extremely costly. 

There are many people out there with HDTs, from a variety of suppliers, who have huge problems – many don't even know it yet. One guy told me it would cost him $100,000 to fix – he got his from a melbourne accountant.