hi Mayuran

Avoid paying paying extra tax?

I would imagine you could set up a bank account as trustee for your kids and place an amount of money that will make the interest come in under $416. Any other cash you could hold in your own account on their behalf.

I am not an accountant and haven't really considered this before so I am not sure of the finer details!

Kids can earn $3333 in interest with no tax this financial year, and only $416 next year.

Do you have a spouse on a low income? maybe a savings account in their name would mean no tax is payable.

I suggest you just work it out – the different scenarios. eg $1000 off the loan means xx less interest = YY more tax. Is this great than the amount you would receive if you used the savings account?

Hi Happy,

I am a bit confused by you first and second advices – how do they differ?

If you buy your PPOR in a trust there are a lot of things to consider.
– If in NSW then extra land tax may be payable.
– loss of CGT exemption
– ability to claim the interest as a tax deduction.

You could possibly buy in your wife's name only. But this can still be risky if you contribute to the purchase or repayments as it may be considered half you house too.

Definitely, if you are using trust to trade or run a business then don't buy a property or any asset in this trust as if the business is attacked the trust assets will be at risk,

If you are going to keep the first home as a rental then you may be able to keep classing that as the main residence and keep it CGT exempt while renting out so CGT may be less of an issue.

I haven't watched the video but think you are misunderstanding a bit.

A super fund is a trust. A SMSF is a super trust that you set up yourself and manage yourself (often with other family members). Since the SMSF is a trust you can have the deed decide how the funds are dealt with on your death.

Sorry, I meant appreciated.

But, seriously, you can claim guard dogs in some instances including their up keep.

Trusts are separate entities for tax purposes. They submit their own tax returns and are separate persons for tax. So any loss that a trust generates cannot be used by a third party.But trusts can negative gear property. Any loss can be used to offset other income of the trust, just not your personal income. This isn't much use for someone starting out or on PAYE tax. Buf if you are self employed it may be possible to divert income from one trust into the trust with the property making a loss. This has the net affect of reducing tax.Also consider buying property in a fixed unit trust. It is possible to borrow to buy units in the trust and the interest from the loans on the units can be used to offset personal income tax. Later the units can be redeemed by the trust and the trust can become a discretionary trust. It is possible to do this without stamp duty being payable in NSW or other states too. It may also be possible to transfer the units into a SMSF later.But, you may find it very hard to get finance for this sort of structure at the moment.

You can talk to your lawyer about trust splitting. Careful plannning may mean it possible to split the trust without a new trust being formed. very complex area though

You would need to see your tax advisor, although the average accountant may not know much about internation tax so you probably will need more specialist advice. Your advisor can probably help you set up the written loan agreement – although they couldn't draft a legal document unless they are a lawyer.

I imagine you would be able to claim the interest on the loan against your US income and will also have to declare this income and expenses in Australia with a credit for any tax paid over there.

It could be that he just misunderstands.

If you want to check you could do an ASIC search on his name and see what companies he is director or and/or shareholder in. Would cost you about $40