Never go directly in my opinion. You need advice on structuring the loan and there are a few tax strategies you could employ with that deposit money too – have your cake and eat it type.

Possibly. Ideally a face to face meeting would be good!

Hi M

It is a well established legal principle that a company is a separate legal person different to its directors and shareholders. But because this has been open to abuse there are many laws in place which can make a director liable. But as long as you or the company are not doing anything illegal you should be right. One risky area is OHS – an employee injures themselves because you as director didn't fix a problem. Another is unpaid super or company tax etc.

Debts, you would generally not be liable for. But there are few lenders who will lend to a $2 company so what happens is they ask for a personal guarantee from the directors – and this means you are guaranteeing the company's debt so if it cannot pay you will have to or be sued and potentially lose your assets. A good reason to have one director only

I have previously attempted to get ANZ to pay a draw down back into the loan and was refused. I went higher up the line as far as a could but no luck.

Also, once you get the money into the loan then how do you use it.

I would advise using a LOC if possible.

Above you seemed to say that there was no loan on the CBD apartment. Are you now saying you are going to mortgage the apartment, borrow money and pay out the townhouse? If so you would be shuffling money around with no benefit.

I can think of a few strategies which could significantly save you some tax.

One is for you to buy your wife's apartment at full market value. Use the proceeds to pay off your townhouse. Charge the tenants market rent – even if you may have to gift them the money to pay. This way you get rid of non deductible debt, avoid stamp duty, save a heap of tax and are in a good position to invest.

Of course there are various steps involved and you should seek legal advice before implementing this.

You could have one big LOC but, this would mean it is secured by each property which is cross collateralising.

These sorts of issues arise in the early days when the investors are trying to get access to equity quickly, but after a while things will slow down as more property is purchased and harvesting equity slows down a bit.

ANZ will not deposit the borrowed amount back into the loan so you need a separate account.

I would still suggest a LOC loan and don't worry about having too many, these could be consolidated when more equity develops in the future.

s102AG ITAA36

income from a will or a trust set up on death is excepted trust income and taxed at adult rates. Can also apply for a child maintenance trust and income from insurance proceeds.

If you are divorced and pay to pay $20,000 in child support, you may have to earn $40k pa to pay this, but if you set up a child maintenance trust the trust could pay the children $20,000 and no tax payable. Many restrictive rules however.

Dying makes things easier as you could leave your extensive property portfolio to a discretionary trust set up in your will and the income to go to minor children – also reduces chance your spouses new partner getting at your money.

Hi M,

It doesn't really matter where you are, but where the property is located!

Children can earn $416 pa without having to pay tax – from inter vivos trusts. But make sure you have a trust in your will because they can earn over $20k pa and not pay tax for income received from a testamentary trust.

Hi Christine

I am in the process of writing several books.

One on tax

one on trusts

one on the tax aspects of interest

one of asset protection

one on succession

still got a long way to go, but hope to have the tax one done in the next few months.