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And what are you looking for and what are you offering?
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
10000,
What the SIS act requires is that a SMSF buying property needs to set up a bare trust to buy it in. The trustee of the bare trust can mortgage that property and only that property. The trustee of the bare trust is acting for the SMSF trustee and is just the legal owner of the property temporarily while there is a mortgage on it.
So if you could work out a situation in a foreign country where a bare trust can be established and find a lender willing to lend to this trustee on the basis that they are the legal owner for someone else and then that may meet the guidelines in the SIS Act. Many hurdles to overcome though. Deposit has to be paid for by the SMSF etc.
No Australian lender is going to lend for overseas properties with the loan secured on those properties. This is even more the case if there will be a SMSF involved.
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
Maybe post some figures.
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
Once the land is sub-divided you can just sell it. It would then have a separate title.
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
Rick sta wrote:Is the establishment of a SMSF viable with a super balance of 50 or 60K?Not really. But it would depend on the situation. It maybe possible for a member to lender money to the SMSF to do a deal. This money could be lend at nil interest. The deal done and the loan repaid etc.
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
10000_Lakes wrote:Hi Good Morning,I came across this thread while googling "Limited Recourse Borrowing for Overseas Property via SMSF"
Just read through it all, and I see information above regarding Citigroup AU offering loans to purchase property in the U.S — does this include the limited recourse structure for buying US property via SMSF? — wondering if there has been any other developments since the last post in June….
Similar to the original poster, we've only been in Australia for a few years so our combined super balance is only ~50K. But wanting to leverage that as a down-payment and structure the limited recourse aspect via a SMSF.
Does Citigroup offer the limited recourse borrowing for overseas investment? Surely there must be some Global banking product out there that recognizes this demand and opportunity. HSBC Premiere banking, etc? Cheers
Nope.
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
Consider
– death
– divorce
– bankruptucy
– withdrawing from the investment
– stamp duty
– borrowing ability
– guarantees
– effect on future borrowings for individuals
– land tax
– cgt
Probably the most flexible structure is a unit trust with a corporate trustee. But the structure within the structure would depend on your situation.
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
TD 2008/27
http://law.ato.gov.au/atolaw/view.htm?docid=TXD/TD200827/NAT/ATO/00001
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 you have a good argument for it. The ATO has also issued another ruling that interest on interest is deductible if the underlying interest is deductible.
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
Even though you are not paying the interest it would still be charged to your loan and would normally be deductible.
But whether what you are doing is ok or not is another matter. The ATO has issued a ruling saying that they can deny a deduction on capitalised interest if the purpose is to pay off the non deductible home loan sooner.
What is your reason for doing this?
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
ryan mclean wrote:I have heard of people working overseas for cash…Seriously? only joking. I was pointing out a mistake in your English "been claiming your income".
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
Declaring your income?
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
income tax, not CGT probably.
It could be possible to transfer the remaining one to a SMSF if the structure is set up first and there is no debt on the property. CGT or income tax would be payable though. But you may get around stamp duty.
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
excellent Freckle.
And if the court case is lost your costs will be capped at around $700.
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
chris_bc wrote:Thanks for your comments Terryw. I think the concepts are starting to set in my head, but I'm still a bit puzzled about whether I'm likely to be better off purchasing in my name or under a trust.I'm currently looking at a short list of properties with cash flow (after accounting for rental management, repairs, rates, etc) of between a few hundred and 2.5k. Because this is pretty small I'm guessing that depreciation and other deductions will shrink this to negative – in which case I'd assume it's better to be personal ownership rather than trust? Or am I barking up the wrong tree?
What do you mean by "better"?
Taxation is only on issue and you need to consider short term as well as long term. What will things be like as rents rise?
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
Sue em
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
If you use your home to produce income then it will be subject to CGT. Probably a % based on use.
The 6 year rule only applies to absences.
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
MyRoom wrote:Thank you Terry.Which Australian Bank would you suggest I try first or do you think it's better to go here in China first?
Regards,
Michael
Nihao Michael
Don't think a Chinese bank would lend for Australian property, but you may be able to check out an aussie bank in China such as NAB etc.
Or speak to a broker.
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
Aussie bank will lend.
IO possible
You will need to come up with a deposit or borrow in china against the chinese properties.
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
Jpcashflow wrote:Hi terry two my properties are securing the BussinessI don't think this would be correct. You have a loan which may have been used to purchase the business. Probably as Richard said you have real property securing this loan.
I was just thinking, from what was written above, if you had a business which was securing the loan then you would be breaching the loan agreement in selling part of the business. Probably not the case though.
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
