not paying the interest on a loan, but letting it build up.Or borrowing from another loan to pay interest.

Here is the TD i referred to which says capitalised interest retains its character:http://law.ato.gov.au/atolaw/view.htm?docid=TXD/TD200827/NAT/ATO/00001I think it is pretty clear, but the ATO can still apply Part IVA and say you are setting up a scheme to avoid tax, so best to get a rling on the overall setup. ie letting interest capitalise and…[Read more]

ok, thats good

Yes. if you get a LOC and use it to purchase an income producing asset and then let the interest capitalise it can be deductible. ie you just let the loan increase, not pay the interest, but still claim it and then use the income from that asset to pay down non-deductible debt – or even better to keep the income in the offset.You could also set up…[Read more]

Never use a company to hold appreciating assets – just for business.

One potential problem is that over time you will end up dramatically under charging your sister because you will be reluctant to put up the rent. But someone looking after the property properly should outweigh this.

It will depend on what the $50,000 withdrawal is used for. if it is used for something associated with the property then the interest will be deductible.There is also another one around this, slower though more effective. According to TD 2008/27 the principles governing the deductibility of compound interest are the same as those governing the…[Read more]

Actually in Victoria it is possible. Not in most states thoughtsees 43 Duties Act 2000 (Vic)http://www.austlii.edu.au/au/legis/vic/consol_act/da200093/s43.html

I think if may help if you are talk about ownership structures rather than finance strucutres. Expenses are claimed by the person or entity that owns the property so if you set up a DT it would claim all costs including depreciation etc. One disadvantage is that if there is a loss this loss is trapped within the trust and cannot be used to offset…[Read more]

Kids and adults under a certain threshold also get a low income rebate too. That is what makes the amount higher. eg. for an adult they are taxed on every cent over $6000 pa, but if they are under a certain amount the govt gives them a rebate for the tax  – so that takes it to $15k before the person has to start paying tax.I think CGT is included…[Read more]

And it is not only your own children, but grandchildren, neices and nephews etc too!each adult can also earn up to $15k tax free pa, so if you have adult kids on maternity leave, at uni etc this can save you a fortune

LAst time I looked kids can earn up to $3000 pa each in unearned income.In addition to what Richard mentioned, which is probably the major factor, you can distribut to a copmany and cap the tax at 30%.

hi NEMost people don't use trusts all. They usually just purchase in their own names. There is not much you can do, no structure, which allows you to utilise someone elses loss.You could gift or lend to the trust so that it has lower loans and more profit – but you will need the cash to do this. This is probably the best way to proceed if you can.…[Read more]

was it this one http://www.allhomes.com.au/

I always thoughty you couldn't apply the main residence CGT exemption to vacant land.You can only have one house count as your main residence at anyone time – except for a 6 month overlap period. The main residence doesn't have to be the one you are living in, but could be the former one. You can just chose whichever has gone up the most in…

hi NEYou can't have your cake and eat it too.The owner of the property claims the costs including depreciation. So in a trust you take the income and deduct expenses and depreciation and if there is a profit this is then distributed. If there is a loss this is trapped and cannot be used to offset personal income. It can be rolled over until the…[Read more]

about 10 years ago they were selling for $115k to $130k. What about now? (for Sydney broadway)

Funny Richard! They have probably paid off their home by now!

ray butters wrote:
Hi,    If i build a house and live in it for a year then sell it will i be able to avoid capital gains tax?

Maybe.If it was your sole residence, your main residence and was owned in your own name and was less than 5 acres in size and not used for a commercial pupose then probably you could avoid CGT.

Some personal loans have redraw, but never heard of one with an offset. You could not use this anyway as you could just withdraw the funds. You may be able to use a term deposit as a guarantee – but you might as well just pay the deposit rather than borrow at 6% and ivnest at 5% and then pay the guarantee fees.