Joseph1 wrote:
Just reading the book 'How to Legally Reduce Your Tax' by Tony Melvin and Ed Chan and they advise in their book nobody owns a trust – it is controlled, not owned. Does this mean you can't own part of a trust ?Please advise ? Thank you.

A trust is a relationship really. Discretionary trusts are set up with a trustee, who is the…[Read more]

Joseph1 wrote:
Please advise how you would go about borrowing money to buy unit trusts ?Is it just through a personal loan or if you get a loan secured against a property for say future investments.

You just buy a house with the Trustee as legal owner of the property and the loan in the name of the unit holder. Eg. XYZ Pty Ltd as trustee for…[Read more]

Hi ChrisSounds like you have been misinformed a bit there.If you have held a property for 12months or more you should be entitled to the 50% reduction in the capital gain. This doesn't mean 50% CGT, but the amount is halved and this is added to your income – so the max you would pay is half of the top tax rate plus medicare = 46.5% X 1/2 = 23.25%.…[Read more]

Trusts cannot distribute losses, only profits.With unit trusts it is possible to borrow to buy the units. If these units are income producing, or likely to produce income, then it may be possible to borrow to buy these units and claim the interest on the loan.Discretionary trusts do not have any units, with the beneficiaries only receiving a…[Read more]

also http://www.chrisbatten.com.au

There is heaps of info out there.Look at these websiteswww.taxlawyer.com.auwww.lawcentral.com.auBooks:Trust Structure Guide 2007 – costs about $300, written for accountants. you may find it in a uni libraryTax Magic. Written by http://www.gatherumgoss.com for the average person, easy to read $99 approx. well worth getting.For the legal aspects, have a…[Read more]

A company would be good as it allows limited liability which can protect the shareholders if things go wrong – the company is sued not the share holders. But a company is inflexxible as profits, or dividends, must be distributed in the percentage of ownership. Companies also do not get the 50% CGT discount.A discretionary trust may be much better.…[Read more]

I don't think there are any general tax implications, but….The ATO can get suspcious of people borrowing money from overseas in some circumstances. This is a strategy which some use to avoid tax when they borrow their own money and pay themselves interest which they claim as a deduction in Australia, yet pay not tax on at the other end.

There are 100% IO loans available for owner occupied. St G also has a 100% loan with no LMI – but a higher rate.If you are going to move in, and then out after 6months, it may be best to use as little of your own money as possible. This will keep your deductions high and free up money for personal use later on. Any spare cash could be put in an…[Read more]

You would not only have to notify them, but get their consent as all owners will need to take the loan out.

Here is my take on your situation.You seem to misunderstand the nature of a business. Just getting an ABN really has no bearing on anything. Assuming you are just getting an ABN in your own name, then you will be a sole trader. Income and expenses just go on your personal tax return. Whether you can claim things depends on the nature of your…[Read more]

Sounds very dangerous if you lack the funds to settle. If you sign a contract, then you will be liable to settle and would probably be sued if you cannot – in return you could sue the person you onsold the property too.

HiIt may not be necessary to refinance. Just ask you existing lender for a new loan and then use this as deposit for the next one (or two).

HiYou can gift a property to a trust, but you will be required to pay stamp duty at market rates. CGT may also apply if the property is an investment. A trust is a separate entity for tax purposes, so, as mentioned, it is the same as you selling to your trust.Trust setup can cost from $200, plus about $200 stamp duty (depending on state, nil in…[Read more]

Lenders will generally only lender on the lower of the value or the purchase price. So if the valuation comes in lower, there is not much you can do – maybe try another lender, or just put in the extra cash if you still think it is a goo deal.

BMW330Ci wrote:
Thanks Cameron,When you say higher interest rates, how much higher than residential? would they be aroud the 8.5% mark?Also, what if wanted low doc? If i keep it below the 60% LVR threshold as you mentioned, would they consider low doc for these types of purchases?To give you an idea, i seen a few taxi plates around the $330,000…[Read more]

sauber wrote:
ThanksThe reason im asking http://dolfderoos.com/media/handouts/proposal_for_finance.pdf

Hi SauberLooks like that is for a commercial property – these are a bit different to residential with the lease looked at in more detail etc.In your standard application you will need to supply many of the things included in this…[Read more]

What state are you in?I think it is possible in NSW, but you are only allowed one owner builder licence ever 5, or so, years.

It is going to cost you dearly if you want to transfer property into a trust later, so it is best to decide straight away if you need one and then consider setting it up.Many years ago when I started investing, I was advised to do one property in my own name to see how it went, and then if I knew I was going to keep going, to set up a trust…[Read more]

A PPOR, called a 'main residence' by the ATO can be rented for up to 6 years and if sold during this time it may be exempt from CGT as long as you are not claiming another property as your main residence at the same time.You may have to pay CGT on the sale of your main residence in some circumstances including:- If you have run a business from the…[Read more]