Protect from what? and Protect what – your contributions, deposit etc?

Having a loan on the property is largely irrelevant for protection. I would suggest you don't go on the loan as this adds no benefit and only detracts from your borrowing capacity and adds considerable risk.

In family law situations generally names on titles do not matter.

In bankruptcy situations, such as if your husband goes bankrupt, then you would have to argue that you have an interest in the property, via deposit or contributions perhaps with your husband as trustee for your share. But if you were to go bankrupt, then you would be arguing the opposite.

A caveat will protect you in that he will be unable to sell the property or further mortgage it with the caveat in place. It can also show the world that you have an interest in the property which will help if he does go bankrupt down the track.

Having a second mortgage will also give you priority over unsecured creditors, but the mortgage would be your personal asset and not good if you go down.

An idea would be to gift money to a trust and then the trust (discretionary) would lend to the husband and the trust could take the mortgage.

There are other ways……

I should add that a broker would have to give back all of his upfront commission if you discharge the loan within 12 months.

The low income tax rebate has been around for years.

Previously kids could get the rebate and earn up to $3,333 (eg trust income) without paying tax, but the recent budget changes mean this figure is now reduced to $416pa

You can generally use a LOC for any purpose once it is established. But, check the loan agreements – you may find the bank can call in the loan at anytime.

But interest on money borrowed for living would not be deductible. Why not live in rents instead and then borrow for investment costs.

BTW, you can actually earn $16,000 and pay no tax because of the low income tax rebates.

( i don't understand your last sentence)

Luke,

You just have to overcome a few rules. From memory these relate to the number of customers you have – income of more than 80% from one source is not good.Do you have control over your work, or does an employer direct you?, do you have your own tools, set you own hours, take your own risks, have you own premises etc.

If you can meet the rules then you could do what you describe. But really the trust should be providing some sort of wage to the person doing the work, so it all shouldn't end up in the trust.

Not an easy question to answer!

Try looking at http://www.bantacs.com.au as they have a PDF document with information on this.

Recently I have started looking at using a unit trust to purchase property. If the property is in NSW a fixed unit trust could enable the land tax free threshold to be obtained. If could also allow you to claim interest against your personal tax return by buying units in your own name, The trust would claim any other expenses in such as depreciation etc.

This works out very similar to having the property in your own name.

But, the units of a unit trust can be transferred, in NSW, without the payment of stamp duty (with a few conditions such as total landholdings being less than $2mil etc). A trust can also borrow money to buy your units. So after a few years when the property has increased the trustee of your trust can borrow money and buy back all, or some, of you units. The interest on this money could be tax deductible in full, or in part at least. The unit trust would covert to a discretionary trust, or part discretionary, at this time.

Another option you will have in the future is to transfer the units of the unit trust to your SMSF, for no stamp duty, and then have the benefits of low or tax free income. The property would need to be unencumbered though.

The biggest problem in doing all this is financing it. The trustee would be one person with the borrower another, which lenders don't really like. Also if you are converting the trust the bank's permission would be needed.

Also CGT would be payable on any increase in the value of the units. But CGT could be minimised by transferring small amounts each year so as not to make a huge capital gain in one hit. The buy back of units would be releasing cash to you personally and this could result in tax savings if you had non-deductible debt for example. It essentially allows you to borrow for personal purposes and have the trust claim a deduction for it.

Very rough eg. Trust buys 123 Smith St for $500,000 using unit trust. You buy 500,000 income producing units. borrowing funds to do so. Trust uses $500,000 from your purchase to pay cash. (all done simultaneously). After 10 years the property may be worth $1mil. Trust borrows $500,000 to buy 250,000 units which are now valued at $2 each. You declare $250,000 CGT, but get the 50% discount = $125,000, so may pay $60,000 CGT. You now have $500,000 cash to upgrade your home. The trust has a loan of $500,000 which it can claim the interest on. You have a new house, but still no debt. The trust is half discretionary, so you get half the income associated with you remaining units and the other half of the income can be dstributed to the lowest income earner so reduced tax is payable

Sorry, I couldn't help myself.

Depends on the wording of the deed again. Often deeds are worded so that if the trustee fails to make a distribution of income or if a resolution to distribute fails then the principle beneficiary may be deemed to take the income. This would prevent the trustee paying tax at the top marginal rate if a mistake happens.

An executor is the legal representative of the deceased person for the purpose of distributing their estate. It could be possible for an executor to be appointed as appointor by a will but again depending on the deed if the deed doesnt allow it then I don't think so. But it is probably not a good idea as this person would control both the trust and the executor you plan on may not end up in the position. Best to have it clear in the deed I think.