Yes it would.

Ignoring the fact that you live in it

If you sell for a $40k gain CGT would be at most $10.

First you take off all associated costs. say $6k

Reduces the gain to $34k

apply 50% discount = $17,000

This is added to your other income.

If you didn't have any or earned about $3k, tax could be nil

If you were on $180k pa the tax would be $7650 or so.

—

If you live in a property that has been rented then you could apportion the CGT on a time basic.

So if held 5 years and you lived in it for 1 year then maybe 20% of the gain is tax free.

CHeck with your accountant

From your question I don't think you do understand the concept.

Same principals apply no matter what the security is. So if you drew down $80k (ie borrowed) and parked this in a savings or offset account and then later used it for investment you will run into the same problems as outlined above.

The same laws apply no matter who the borrower is.

Interest is only deductible if the funds used are borrowed to invest.

You are borrowing and parking in a savings account before the investing. The direct nexus is thereby broken. Once the funds are in the savings account they are no longer borrowed.

However all is not lost, you may still be able to trace the money and there is a PBR which allowed interest to be deductible on something similar.

But, if there is any other money in the savings account then the full interest cannot be deductible and must be apportioned. The authority for this is the case of Domjan from 2004. Mrs Domjan borrowed money and put it in a cheque account for about 1 day just to write a cheque. She had other cash in the cheque account and this caused her to lose the full deductibility of the interest on that borrowed money.

eg.

Joe borrows $40,000 and gets an IO loan because the LOC rate was slighly higher. His accountant tells him there will be no tax problems and to just stick it in his offset account. 

The offset account has $20,000 in it already. Now it will have $60,000

The percentage balances are  33% private and 66% investment.

So Joe will, at best, only be able to claim interest on 66% of the interest incurred on the $40,000.

At worse it will be much less if Joe has put money in and taken it out several times – and it will be much harder to calculate.

I stand by my comments!

Doesn't matter if it was one hour.

You should seek tax advice.

Sounds like a covenant

http://www.austlii.edu.au/au/legis/nsw/consol_act/ca1919141/s88b.html

a business name is just that – a name. It doesn't matter what you call a trust as that doesn't change things. Where you are giving a personal guarantee this will limit your borrowing capacity as if you had that loan yourself.

If you have hit the serviceability wall you could possibly more forward by having others take the position of director of the trustee company and thereby you avoiding the guarantee – but they will need to.

From one name to 2 names you can. Without checking, i think you cannot go from 2 to 1.

Squiresy,

You could possibly transfer your interest in your property to your spouse. If in VIC it could be exempt from stamp duty.

But because ownership is changing she will need to apply for a new loan. If you guarantee this loan then you haven't achieved much – your borrowing capacity will be the same.

Also setting up a trust won't assist in increasing your borrowing capacity. Neither will multiple trusts.

Yes, they can.

Which lender is this?