probably best to speak to a lawyer as a trust is a legal device, a relationship in equity and only lawyers can give legal advice. Many can also give tax advice.

It could be anything depending on the circumstances. It will depend on a lot of thing – ability to claim the main residence exemption, land tax, intention with the front property, stamp duty laws, asset protection, estate planning etc etc

Once you determine which legal owner then you have to work out how to structure the structure. If it a company acting as trustee of a discretionary trust, then how to you fund the deposit, how about the remainder, who should be shareholder, director, terms of the trust, should the trustee be excluded as a beneficiary, should there be different capital and income beneficiaires, should default beneficiaries be included, if so what about the asset protecton issues etc

You need specific legal and tax advice.

The loan relates to 2 or more uses.

Your loan is current $1mil right?

Part of this relates to the purchase of the current property and part relates to not much, you borrowed and put in an offset mixing with cash.

If you put $800k into a $1mil loan the balance will be $200k, but this balance partially relates to the purchase of the property and partially to the mixing in an offset account.

It will be mixed furhter if you pull $800k out to invest. You could only claim part of the interest.

But if you split the loan and paid $800k into an $800k split and redrew to invest the interest could be deductible in full, if you do it right, as there would be no mixing then. 100% of it was used for the 1 investment.

It is not really relevant if you move back in or not.

You now have a mixed loan, so a few issues there.

If you pay the loan down by $800k it will be mixing it furhter so you should split it. Pay $800k into a $800k split and redraw it and invest it. If the investment is expected to produce income, such as rent, the interest on this split would generally be deductible.

Deductibility is determined by the use of the money borrowed, not the security. So if you borrow another $640k and invest it the income will be deductible. THe main criterisa is  that it needs to generate income.

Seek specific tax advice.

Jaidyn98 wrote:

using a lawyer over a solicitor?

Lawyers and solicitors are basically the same thing. Lawyers is a generic term which includes both solicitors and barristers

Commercial loans can be done in individual names

If you are asking about ownership structure then seek specific legal advice as many issues consider.  Transfer of title or declaration of trust will both attact duty and CGT to it pays to get advice.

It might be possible to go to separate lenders – might be hard if one contract of sale though

There is plenty of information out there. Perhaps start off looking at the loans available to SMSFs. The number of lenders is dwindling and the ones that do lend are making the most out of it with high rates and fees.

Once the trustee has purchased property it cannot be leveraged against – the equity cannot be borrowed against so think of it has basically a one off purchase that you set and forget.

Also consider the estate planning aspects if a member dies and their death benefits need to be paid out that would probably mean the fund has to sell to get the cash to pay out the member, and this could be costly in the early years and/or if there is a decrease in value.

Best to talk to a lawyer – but no differences in duty between trustees and persons/companies.

But should you be putting the unit into trust? Possibly not.

This is something you need legal and tax advice on – and credit advice.

Once you decide you will need to consider structuring the company and trust and how to structure the funding of it. There are traps at every step along the way.

Any specific questions please list them here and i will answer.