I don’t think there is any problem with one director – this is generally recommended as it limits the guarantees required by lenders. The trustee is just the ‘person’ that runs the trust.

The ASIC could probably be paid by the trust, as the trustee exists to run the trust in this case and would have no income.

Shareholders cannot be held…[Read more]

If you have to sell, then I agree that now is not a very good time due to the slump. What about just selling one if you really have to – this will ease the monthly repayments at least.

Terryw
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I believe ‘corpus’ relates to the capital or principal of the trust. So maybe corpus beneficiary is one who receives the capital of a trust when it is wound up? Just guessing here.

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That sounds correct. The ATO will check what the funds are used for.

You see, if you put money into a loan, you are paying it off. When you take the money out again you are actually reborrowing money – a new loan.

If you had an interest only loan and placed all extra funds in a 100% offset account, then you would have saved the same interest,…[Read more]

Depreciation is a cost of holding the asset. The asset is owned by the trust, so it would be the trust that claims any depreciation.

The individual can only claim the interest – because they have purchased income producing units in the trust.

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Do whatever you think will make you the most money. It’s good to get high rents, but I can see no point in buying in country areas myself because of the lack of capital gains. Depends on the areas I guess.

Terryw
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Hi Dutchie

I agree discretionary trusts are great. But watch out if your properties are making a loss (ie negative geared) as the losses cannot be utilised until the trusts makes a profit. Maybe look into hybrid discretionary trusts if this is the case.

Also trusts are not taxed the same as a business. Trusts no not normally pay tax at all.…[Read more]

It may also depend on how many of these you have done. If it is a regular occurrance done in a business like fashion, the ATO could still charge you CGT on your own home. Theoretically at least.

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If your name was added to the loan, the rate would jump to around 10%, this would make a huge difference in repayments. If you want to argue that you are buying a house, your name generally has to appear on title unless you are using a trustee to buy it for you. In which case you will need legal advice.

Maybe you could explain your dilemma to the…[Read more]

What state?

I have discussions with a good solicitor in VIC about releasing deposits a few years ago and she declared it was impossible.

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PTN,

You trust is a business, so you can only claim a deduction for business related activity. If you travel relates to the business, then it could be claimable.

Dale Gatherum Goss says you can claim small items and one off gifts that you could not otherwise claim.

You can rent a house form your trust and the trust claim the interest etc, but…[Read more]

Originally posted by ctaing:
Much obliged Terry.

I’m cautious and don’t have great appetite for debt at the moment. But the experts are touting it the best way forward. My current bank is not one to let up in taking more security than it needs, and I hate paying hefty LMI.

Back to reading more of your posts on LMI; and the legalities of…[Read more]

Just apply for a loan increase with your existing lender. Maybe go to 80% LVR as a LOC and have a separate loan to the first. That way you can use the funds for the deposit on the next property and borrow the remainder as another loan. Interest could also be paid from the LOC.

Terryw
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CT

With a trust the banks only need to take the security as collateral. Same as without a trust. Some banks also want to take a charge over a company if a corporate trustee is involved too – pain the the butt, but I don’t think it affects things much.

Terryw
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Very interesting Dr X.

Funny about agents calling. A friend of mine sold his unit privately, he put an ad in the paper and specified “no agents”. For the next week he was called by no one but agents trying to get a listing.

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Thanks for that Mcdeyess

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Hi CT

My understanding is that the loan needs to be in the unit holder’s name – which is not necessarily trustee. However, I have seen a few client come to me with it all setup incorrectly, they have the hybrid setup, but have the loan in the trustee’s name, so won’t have any tax advantages.

From what I have seen, if the property in creases in…[Read more]

I am not a solicitor, but would wonder if it is necessary to list either of you as named beneficiaries. Usually trust deeds are worded so that the trustee and appointer and their relatives are automatically beneficiaries. Not sure what legal effects listing or not listing will have.

There may be tax effects too. eg. if you forget to distribute…[Read more]

You may save these fees by selling yourself, but an agent may be able to sell it for a higher price and quicker. This needs to be considered as well.

I have found sales commissions to be around 2.5% of sale price. Some charge extra for advertising, others include it in the fee.

Terryw
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PTN, why is it going to be hard? You can just have one trust. The trustee will just chose who to distribute to each you.

Only a individual or company (or combinations) can be trustees. Another trust cannot. But one trust can be a beneficiary of another.

Terryw
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