Still not clear.

Sounds like you are borrowing $240 secured against the PPOR and will then place this in an offset account = Not good.

Not a good set up.

1. What do you mean the deposit of the IP will be in the offset? if you borrow to park into an offset you run the risk of destroying the deductibility of interest. If you are saving a saving a deposit in the offset then you are wasting deductions as you will be using cash for an IP while you still have non deductible debt

Why…[Read more]

Generally deposits are held in trust for the vendor. This means it is still your money until certain conditions are met – such as completing the contract.

I just reviewed a contract which allowed release of deposit and I quickly struck this clause out as there is a risk the vendor won’t complete and could go bankrupt or someone else could put a…[Read more]

No crossing here.
LOC secured against PPOR
IO loan secured against IP

Never borrow to put in an offset account. This is very dangerous as it could ruin the deductibility of interest.

Use a LOC on the PPOR, borrow only to invest.
Set up an IO loan on the investment property and attach a offset account to this. All wages and rents into here.

Take the 23% from the LOC and borrow 80% on the IP = 103%

Define ‘best’ first!

This is such a broad question it is impossible to answer. but generally you might want to consider that units may have less land value than houses. Land values generally increase, but the value of the buildings gradually decreases as it ages.

Basically
1. via loans
2. via ownership

One party can lend to the other and/or the parties can jointly own the property, either directly of indirectly.

Thinking about the Lyons case further. Mr Lyons became bankrupt at some stage after lending SMSF funds to the brother in law (BIL). This loan was between the SMSF trustee and BIL – and would generally be legally enforceable, even if no contract or deed entered into, for up to 6 years after the loan was made.

If Lyons was bankrupt the trustee in…[Read more]

Here is a case, from 2014, where the member caused the fund to lend to a relative who them lent the money back to the member – who later went bankrupt!

Deputy Commissioner of Taxation v Lyons [2014] FCA 1353.

An SMSF trustee has been fined $32,500 for lending money to a related party, in a recent Federal Court…[Read more]

Best to look at the actual laws in relation to this

see http://www.austlii.edu.au/au/legis/cth/consol_act/sia1993473/
SIS Act
look at Part 20, from sections 157 onwards. also Part 21

Yes, one of my tenants died.

But the lease does not stop immediately at death. Notice must still be given and the estate is still liable up to this point.
See the actual law on this
s108 RTA (NSW)
http://www.austlii.edu.au/au/legis/nsw/consol_act/rta2010207/s108.html

You cannot dispose of someone else’s assets. The family will usually come to…[Read more]

Yes. Ownership is changing so new loans are needed. Discharge of mortgage and new mortgage. Seek legal and tax advice too as many issues.

Depends on the terms of the contract.

ok,

Yes it seems silly that they allow it for business but not non business property. I suppose the problems that could arise would be people not being able to pay the rent and the trustee (them) having to kick themselves out of their own home.

partners are not included in an individual SMSF but a spouse is a related party and a member or a related party cannot benefit from the member’s super until that member meets a condition of release.

It makes perfect sense because the sole purpose of super is to assist in a member’s retirement.

Depreciation cannot be transferred. Owner of the property – from a tax point of view = the unit trust will be able to claim all expenses and make a distribution to the unit holders.

Have you sought advice on this set up and are you sure it is a good idea?

Yes its similar, but the AFSL is much harder to obtain and there is much more compliance and regulation. It costs much more than broking as well.

I am both an FP and an MB and so is Richard.

Thats right the trails are paid to the licence holder who passes it on to the authorised rep.. Might be difficult.

Nope.

I do like the Zinger burgers though.