Yes it relates to creating a mixed loan. If you are redrawing from a PPOR loan then you would need to apportion the interest (assuming the redraw relates to investing). But since it is one big loan any deposit into the loan will come off both portions. This means you will be repaying tax deductible debt. Also it will become increasingly difficult…[Read more]

Interest on money borrowed to invest can be deductible under s8-1 ITAA97.
But borrowing to place into a savings account means the money is no longer borrowed money, but cash. If this cash is later invested the direct connection between the borrowing and the investing is not there.

There is an argument that the funds can be traced to the loan.…[Read more]

Joe – loan 2 would be secured by the PPOR.

Do not redraw funds and place into an offset as they will not longer be borrowed funds.

an offset account is a savings account and not a loan so your loan balance will not change if you withdraw money/. No effect on LMI.

Even if you pay the loan down and use redraw (not a good idea usually) then this won’t effect LMI at all either.

You will only incur LMI if you borrow more than the original amount and the LVR is more than 80%>

Seek legal advice before contacting as extra risks from creditors.

A development involves making something and selling it. properties in this case. Similar to a gadget maker making something to sell – trading stock and/or income tax. Capital gains tax applies to certain assets that are bought to hold longer term with the aim of producing an income from the property and the later sale being incidental.

Her debt is not your debt, so you would not be assessed on it unless you go on the loan too or guarantee the loan.

Most lenders base your expenses on your status – married/single plus dependants etc.

Yes totally normal and a strategy that I recommend. But get legal advice – what if she/he dies and leaves the property to her mother, what if she…[Read more]

prob not. many issues involved. GST?

Good point, but this isn’t necessarily the case. It would all depend on a number of factors s79.

virtually all lenders lend to trusts.

only on special 1 year fixed loans. Variable – the amount of interest is not certain.

Yes. prepaying means paying in advance. The loan will be fixed for the next 12 months so no payments will be due until the expiry of the 12 months.

1. yes
2. yes
3. still subject to Australian tax laws. e.g. no CGT in NZ, but as you are a resident here disposal of a NZ property would result in CGT here.

Do you have a main residence? If so then I would pay this off. If not then I would buy one. You can then leverage off that.

Get some legal advice on structuring things for tax effeciency and also asset protection.

You can make a declaration that you now own the shares as trustee of the existing trust.

If the SMSF purchased the unit outright it would be using up its cash so may not be able to afford a second unit withtout further extra contributions.

Why would you want to buy a small unit? Do you think this would be a good investment? How small are we talking?

$120k is not much capital to start with. Is the SMSF already set up?

Are you looking to buy in the SMSF or in your own names?

If a SMSF it may not be a good idea to buy without finance as the property cannot be later mortgaged or used as security for further investing.

I presume the apartment is small – is that why you cannot finance?

You cannot contract with yourself so you would have to make a declaration of trust. Shares – need to pay duty in some states. If the trust owns property in QLD could be a lot of duty.

Sounds like you are not really getting instant equity if you cannot resell it qiickly. think carefully.