Bankruptcy is possibly a good solution. You should speak to your lawyer about this asap.

Shape wrote:

Hi steve, There's a lot of numbers there- i will have to sit down and work it out and post back later – bur for now i will answer your 4 questions. 1. Trust is quite simple- it's similar to a company, but the pit fall is WHICH type of trust you want to open and What structure/how – this will have a huge bearing in term of your tax and financial objective – you will need to speak to a accountant/ financial planer for this part. 2. The high LVR has started to come back. 85% LVR – no LMI. Any LVR higher- LMI is payable, but depending on which lender you go with it can be reduced by 50%. 3. I will need to work out your above number to see what your serviceability looks like. 4. $500 is over priced for a valuer, it's normally around $220 for a private valuer! can i ask whats the reason for getting a valuer? It sounds like your after a way to increase your rent-wouldn;t speaking to your agent who deals with this on a regular basis make more sense? Regards Michael

I have to say I think trusts are extremely complex. The tax law regarding trusts is vast and largely uncomprehendsible to the majority of accountants and tax advisors. The same with the law surrounding trusts. It is vast and complex with the average lawyer not knowing much about it at all.

I think many people don't even consider a small fraction of the things they should when setting up a trust.. eg Duties of the trustee..

Any deposit into a loan is a payment and any wthdrawal is new borrowings.

If you pay money in advance into a loan and then later take it out to buy a new main residence the interest on this 'new borrowings' will not be deductible.

have a look at this weeks newsletter at http://www.bantacs.com.au (no 222 from memory) as there is a really good article on this sort of thing

If your trustee is trading then it is a trading company – it is just operating as a trustee. The tax return is a separate issue. A trust will need to lodge its own tax return and the trustee company will also need to lodge a return, but if it doesn't trade in its own right then it will not have any income.

You can't backdate legal documents. And, even if you did, what about the ABN number for the trust, GST registration and TFN. Your trust will need these too.

If you keep paying PI you are locking your cash away in an investment property. This not only decreases deductions but prevents you from accessing that cash for private usage without adverse tax consequences.

eg imagine you had paid down the loan by $100,000 and then you decide to buy a new PPOR. You cash is locked away. You may take it out via redraw, but you would have to pay about $7000 in interest for this money and not be able to deduct it.

Now say you had $100,000 in the offset. This would result in the same interest, but when you want to buy your new PPOR you remvoe the money from the offset account and use it. You then will pay an extra $7,000 pa interest on your investment loan, but you will be able to claim the interest on this.

This strategy may save you $3,000 pa. over 25 years this adds up!

Best to see a good accountant that understands trust law and taxation of trusts. A deed with a bit of advice will cost you around $1000. There will be additional costs for stamp duty on the deed in some states (NSW $500) and company set up if needed.

On going costs will be annual tax return for the trust – but this should not be so much more than if you bought a property in your own name. If you use a company as trustee the company will need its own tax return as well – nil return so won't cost much. You will also need to pay ASIC an annual fee of around $212.

There is a chubby Indian guy based in Bahrain who might be able to do it:
http://www.smh.com.au/business/30m-gone-jetsetter-accused-of-having-a-lend-20110302-1bexw.html

Why use a conveyancer??

Looks like you have been caught out by a sunset clause. This was in the contract when you signed and you accepted it. You would have had the chance to negotiate a longer period during your initial negotiations.

It is best to use a lawyer I think.

The trust could lend you the money back. Just make sure your trust deed allows it to lend money to a beneficiary.

Think long term.

If you own 99% now then you will pay 99% of the tax later. A property should only be negative for a short time and there will also be a  CG (otherwise there is no point).