Without the fee the depreciation schedule would be the same too.

Andrew

If your wife owns the property then getting the LOC in your name would mean she has to guarantee the loan, this adds double the risk as you are both on the line.

You should probably only pay the LOC back if you have paid off all personal debt first. Personal debt is not deductible whereas investment debt is. You don't seem to have any personal debt, so you could pay off the LOC, but it may be better to just place the spare cash into the 100% offset account attached to the IO loan.

Whose name will you get the LOC in? Probably best just in your wife's name

1. Yes. Your wife could borrow the money could lend you or the trustee of your trust the money.
2.  Yes.
3. Probably best to use the LOC. Then set up a 100% offset account on the new IP loan and place your cash into that. If you use your cash now then it will be tied up in the investment and then you cannot use it for personal stuff without reborrowing it. Then you could have to pay non deductible interest to access the money.
4. IO loan. Or cross collaterise the security (not good). I think a LOC is the easiest and safest way.

I think you are equating a redraw facility with an offset account. These are totally separate and different products and care needs to be taken when deciding which one to use.

Assume that someone has a home and pays down the principle a fair bit.

If they also have money in an offset and then decided to use that money as deposit for an investment property then they would be disadvantaging themselves. This is because the interest on the home loan would increase when they take money out of an offset. The extra interest incurred wouldn't be deductible as it is interest in relation to the loan used to acquire the main residence.

Now if they used redraw the situation would be different. If they used redraw they would be borrowing money. Taking money from a redraw equates to a new loan. The interest on this new loan would generally be deductible if they used the money for the deposit on an investment property.

So by just knowing this little bit they have saved themselves possibly thousands in tax every year.

But, ideally they shouldn't use redraw as the loan would be then one big loan with part of it used for the investment and part used for the main residence purchase. Each subsequent repaying into this loan would have to come off the investment portion as well as the non-deductible portion. That means they would be paying down their investment loan before they have paid off their non-deductible loan. This means they are losing tax.

A better way would be to set up a new loan split, IO of course, secured against their home. They can then keep the investment and private portions separate and then save more tax.

depends how you do it.

If you put in cash from a savings account, you cannot later substitute this with borrowed funds and be able to claim the interest.

Buying with others can lead to many problems. You need to consider many problems which could occur such as:

– bankruptcy of one party
– death of one party,
– divorce of one party
– who does what?
– who pays for what?
– what happens if one wants to sell and the other doesn't
– what about equity – how to access
– effects on pension of your parents in future
– borrowing issues
– FHOG and stamp duty concessions
– land tax, CGT etc

But, having said that, it may not be possible for you to go in on your own so having a parent help may be a way to get in earlier.

Maybe consider using a trust structure so they can assist and then hand over the reigns once you get up and running. Or the guarantee method with the intention to release the guarantee in a few years.

I recall seeing an online calc for CGT on the ATO site

I see you have averaged your ages, and it would be good if you could average your incomes as well, but ithink you would still be on more than $200,000 pa and on the top rate.

Depending on what sort of work your husband does it may be possible to divert some of his income into a company or a service trust. This should enable the tax rate to be 30% max on this portion. From there you can develop strategies to get the income out now in the form of loans or later on when your incomes are lower.

You could also look at super, smsf etc, but the money may be locked away for 20 more years.

Developing the farm is a good idea, but it won't save you tax.

If you have more than enough money to survive then I would look at gifting money to a discretionary trust. I think buying more assets in your own name is not a good idea, although it may assist with reducing the tax initially you will be making a tax time bomb.

You can’t have your cake and eat it too!

I think you may find that if u have a spouse then centrelink will consider trusts they control to be the same as ones you control

There is no real way to do it without entrusting someone

Some insurance payouts would be taxable. If it is non taxable then the ATO may not find out. But the insurance companies may also inform the ATO of any payouts as well. Some insurance payouts may not affect centrelink payments, but others will and they do specifically ask questions about them. If you lie you may get away with it, but you may also get caught.

There is also a financial database called AUSTRAC. All transactions in Australia are recorded and both Centrelink and the ATO have Austrac access. So if they were investigating someone they could do a search and find evidence of deposts and money transfers. All banks, and many other institutions such as casinos etc are required by law to notify Austrac of certain transactions.