No Australian bank is going to lend on overseas security because of the difficulty in enforcing the mortgage in a foreign jurisdiction. You will need to borrow against the property using a lender in the country where the property is located.

I am generally in favour of giving all loans to one bank initially to get a larger discount. Discounts are for the life of the loan so you can gradually refinance a few loans away without dropping rate. But I generally like to keep loans around $2mil per lender.

The risk comes down to missing a loan repayment or 2 and things slowly escalating. If…[Read more]

I just got a 1.18% discount with Westpac for a $900k 90% LVR lend with no lmi (dr). recently get 1.25% off with St G for a similar amount. 1.05% off ANZ for $512k etc

but with CBA got 1.05% off doe a $430k lend.

So your 1.15% is not much for such a high debt.

Tom resigning as director would likely be a breach of the mortgage agreement for existing loans. All these loans would need to be redone with the new director as guarantor. Lender would also see trustee owning existing properties with loans.

In summary – no won’t extend borrowing capacity, unless perhaps the wife has a much higher income.

I don’t have an idea what Steven is talking about. But here is an example of how restructuring a trust could help in one instance.

Tom is director of Tommo Pty Ltd which is trustee of the Tombo Trust. Tommo Pty Ltd owns a property as trustee of the trust and the property is worth $500,000 at purchase with a loan of $400,000. After 5 years the…[Read more]

If the new company had the same directors the same problems would arise. You would also have trust assets owned by a non trustee which would cause other problems including possibly breach of existing mortgage agreements.

Much less than NSW which is 1.6% with no tax free threshold.

I don’t think directors are personally liable (in VIC), but the trustee company is. However it has a right of reimbursement out of the trust property, both under trust law and under land tax legislation. Don’t forget land tax is a first charge over the land – beats even mortgages.

In QLD individuals generally get the $600k threshold each. Non individuals, absent individuals all get a lower threshold of $350k each.

For a SMSF and a unit trust see schedule 2 of the land tax act QLD.

In QLD separate trusts each get a threshold, but there is a trap for young players here so get advice.

CGT probably wouldn’t apply to a development, but income tax. GST. Stamp duty also. And don’t forget land tax

I would suggest a car park is a bad investment. Best to avoid.

Another issue is whether a bank would be willing to lend you by securing an unrelated party’s property.

Since each trust needs a separate tax return it shouldn’t make much different in fees for the tax return. A company as trustee has no income or expenses of its own so would be a nil return – maybe no return needed at all.

I can’t remember what I wrote in that book now, but now that you mention it I may have covered changing trustees!

Being a director is a role, not property that can fall into the hands of creditors – but the shares of the company can. So it may be a good idea to change trustees asap.

first thing to do is to review the deed. Find out who has the power to change trustees. Often it will be the appointor, sometimes it may be an appointor and a protector other…[Read more]

Generally not a good idea for a few reasons:

1. Harder to prove which assets belong to which trust.

2. Lenders may take a PPSR charge over the company so going to different lenders could result in a breach of the mortgage agreement.

ASIC fees are only $243 or so per year so having a second company is not such a big cost. No tax return should be…[Read more]

Legally speaking only if the trust terms allow it, otherwise a breach of trust.

Do you want the trustee to obtain a margin loan against the shares? (see if trustee is allowed to do this first) and then consider whether this is a good idea in terms of risk. If not talking about margin loans then perhaps you asking if the trustee can lend trust…[Read more]

2 possiblities
1. could be totally exempt under s118-145
or
2. could be subject to CGT on the gain after you moved out under s118-192.

You could choose and may want to choose 2 if it will result in little to no tax as choosing 1 may make the current home is subject to CGT. Seek specific tax advcie.

If you sold yo would have around $100k cash. Using this on a PPOR will save you around $5000 pa in interest each year for the next 20-30 years. You might then be able to borrow to invest and get something with better capital growth prospects.

Perhaps just let this one pay itself off may be the ‘best’ option. As the LVR is about 50% it won’t be hurting serviceability too much.

Borrowing further against the property will make things messy in terms of working out who gets what. I have clients who do this and increase the loan and then use half each for further investments in own name. If…[Read more]