Forum Replies Created
Probably read as much as you can first and then speak to a lawyer
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
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.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Unless… If it was a farm, there is a possibility of living on in the house and surrounding 5 acres.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
This would breach superannuation legislation.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Who advise you this and what is the purpose?
A rebate to get a higher loan amount could be deceptive to the lender.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
This must be a victorian purchase?? Off the top of my head you would get the owner occupied rate if you intend to live in the property and actually live in it.
Fences are not deductible. This would be capital works, same with the paint. You could merely depreciate them at 2.5% pa over 40 years.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
You will max out at some point. Generally where a borrower is a company and you give a guarantee if you go and apply to borrow again, if your own name or under another company, the loan you have guaranteed will count the same as if you were the borrower yourself.
There are limited lenders where guarantees may not be counted as debts, if the borrow can demonstrate they can pay the loan without help from the guarantor.
Speak to a lawyer about ownership structure and a broker about borrowing.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
It should be ok to stand I think. Many people seem to have these thoughts!
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
I am a lawyer so couldn’t advocate lying to the ATO.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
<div class=”d4p-bbt-quote-title”>ricky1990 wrote:</div>
Your friend can show that he lived there if he has some proofs such as recordsstatements, letters, etc… to that property instead of where they are actually living. Now they have all the “evidence” that they live in that house.
The ATO searches the rental bond register too – which would be evidence the house is rented out so the full main residence exemption would be llost – and you cannot use the 6 year rule when still living there and renting out part of the property
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
I know some real estate experts, one of them is Naval Aulakh. He’ll be the best person who can help you with your problem. Hope this helped!
Are you implying that the op should go to a real estate agent for tax advice?
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Hello, If I sell my IP but I have never lived in it, is there anything I can do to demonstrate that I “lived” in the property within the 6 year window so I don’t have to pay CGT? Asking for a friend Thanks Bobby
No.
The requirement is not ‘live’ but reside in it as your main residence.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
The directors and shareholders of the company must also list their home addresses and these are publically searchable too. Most of my clients use their home addresses for both the registered office and principal place of business.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
I still haven’t read the legislation but believe the risk is having to sell while being overseas – then there is no exemption, no 50% CGT discount and potentially huge capital gains tax as a result. I know there are some small concessions for dying overseas – but not much of a concession.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Don’t forget that a trust is not a legal entity, so you would have to transfer it to the trustee of the trust.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Well trusts are legal devices and only lawyers should advise on them. But transferring property to a trustee or declaring a trust over property will be a CGT event so perhaps a tax agent would be best for the first point of call as if the CGT is large you might not want to proceed.
Ones you think it is worth considering them you need to seek legal advice on
a) the legal consequences, and then
b) the terms of the trust, structuring the trustee, how to fund the trust etc.
Actually first point of call might be a broker as not having the ability for the trustee to finance it may mean there is no point.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
I have 2 separate clients at the moment who are being held back because of joint purchases with others.
You should seek specific legal advice – from a lawyer – but something that can work in some cases is buying in single names with the other lending the deposit. After a while this will quickly eat up borrowing capacity and then going in together in a way that allows easy exit later but joint income for borrowing capacity now can work.
Depending on the location of land this could be a fixed unit trust or even 2 discretionary trusts holding the one property. Companies can be considered too in some states.
Best to seek specific advice
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
a casual worker would need 3 to 12 months in the job to be considered. If LMI is involved some lenders won’t consider casual works as the sole borrower.
You might be able to change to part timmme to help qualify for the loan
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
A deposit is only one aspect to consider, income is the other main one. As a general rule of thumb you can borrow about 6 to 7 times your annual gross salary.
But watch out if the work is casual as it will be much harder to qualify
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Sounds like it might be on revenue account or partially capital and partially revenue.
If you can get it on capital account you could potentially renovate, live in the first house for 3 months and sell it CGT free.
If you just want to reno and sell it would probably be on revenue account which might have a similar outcome anyway. Don’t forget to get advice on the GST aspects.
as for cost base you would need to apportion between the 2 factoring in both the land and the house.
see s 112-25 ITAA97 and s 112-30ITAA97
Don’t forget the deductibility of interest too.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au