Yes, you would be taxed as you are doing this with a profit in mind. You could possibly help your grandmother though and she could gift to you.

However, there are many complex legal issues such as:

1. Capacity – does grandma have legal capacity? Could there be allegations of elder abuse involving undue influence etc. Often this will come from other family members

2. Losing capacity. She you do set up all up now and then grandma loses capacity. Has she appointed an enduring attorney? What will this person think? If it is you does the deed allow the attorney to make gifts to themselves?

3. Death. What if grandma dies? Who is the executor of the estate? Will they honor the agreement?

4. Death – what if you die? You have tied up your cash, can your estate get this back?

5. Gifting – pensions would be affected

CGT may or may not apply. Don't assume because it was a main residence that it won't apply for grandma.

Wilko, don't know what you mean when you write: "But certain gifts to different trusts can take larger amounts then the individual." But it is incorrect.

How you think you got the best deal? What are you measuring against?

I've seen a lot of people fall down because they deviate from their plan. Don't lend anyone money! I can't believe how many people have lend large sums of money and can't get it back!

Don't get side tracked into some sort of buisness scheme – most fail.

Don't get side tracked into shares if that is not your area and not in your plan

etc

I might have an old wrap kit floating around somewhere. Will have a look over christmas.

Why bother?

too many variables such as commercial or resident. LVR, total borrowings with lender, individual or company borrower etc

g. I have a client paying 4.83% with ANZ. He is getting a much better rate, but his situation is totally different.

No lender will accept a valuation you do yourself. Even if the valuer is on the panel. The valuer will do a new report even if you had just ordered one – they will probably even visit the property again. The valuation amount will usually be the same, but not always. When you order your valuation you have to tell the valuer what it is for – mortgage with ANZ etc and they will then value it accordingly.

This has happened because you have crossed the properties as security for the loans. ie cross collateralised.

Not much you can do now.

But, if there has been no CG in 10 years wouldn't you be better off selling the other unit as well?

Colin, one major difference is the ability to have a cheque book on the loan account. This enables money to be borrowed and applied directly avoiding potential contamination issues.

Subdivision itself won't be a CGT event. If you don't sell then no tax payble.

if you sell then it would be dependant on a few things – including sale price.

Best to let it all settle and then fix the problem asap.