Trusts don't have directors – only trustees or or directors of the trustee company.

Adding a director will not result in any stamp duty implications.

If you have an individual as trustee and want to change this by adding another trustee then this is not so easy. The trustee has the title to property in their names so changing the trustee will result in need to change the title to all property. This will mean changing and re applying for all loans. Stamp duty on this may be applicable or may not – you have to look in the Duties Act of the state the property is located in. see for NSW,
http://www.austlii.edu.au/au/legis/nsw/consol_act/da199793/s54.html

Usually loans are documented before the lending is done. Doing it later will weaken it – making it look more like a sham to defeat creditors. I would prepare it now. Lend him more than he needs and then he can give some back if need be.

Priority.

Having an informal loan agreement could mean missing out if things go wrong and other creditors have competing claims and establish greater priority. Having a registered mortgage will give the greatest priority.

hi Luke

I used to be against selling, but now can see the value in it – especially with the greater difficulty in now getting loans.

A good reason to sell would be to pay off personal debt. So selling an IP with a lot of equity in it while you have a high non-deductible loan would be an example.

If we are talking about selling a PPOR to use the proceeds to invest, then this isn't a good idea. Firstly the CGT free status will be lost and would be wasted if you are not claiming another place as your main residence. CGT is a very big issue. Imagine you had a $500,000 gain = $125,000 in possible tax payable.

Also by tying up your cash in investments you won't be able to buy a place to live in in the future – or you will end up borrowing more which means higher non deductible debt, while possibly having to pay tax on your positive geared proeprties.

unless you had previously lived in the property by moving in now you would not be able to save much tax at all.

you should see a solicitor. You would need a written loan agreement and mortgage drawn up. the mortgage has to be registered with the land titles office in the state of the property. You should prepare it in advance and lodge the mortgage on settlement after the bank lodges theirs.

If you borrow to pay out personal debt the interest will not be deductible.

What you could do is to set up your loans carefully so that you may be able to borrow to pay interest expenses on the investment loans and to divert cash to the private debt. You will need professional advice and a private ruling may be a good idea – make sure your accountant is up to it and understands this and has read other private rulings on the issues.

you can probably keep their deposit and sue them for any shortfall on a subsequent sale. Whether you get anymore money out of them will depend if they have any assets.

I should add, that way if you marry someone in 10 days and he/she has 5 children then they will automatically become beneficiaries. If you want to add a company as beneficiary down the track then you can form a new one and become director of it and it will become a beneficiary – then you can distribute to that and cap the tax at 30%.

Asset protection and estate planning. tax can also be capped at 30% and later if you get a spouse/chidlren you can effectively distribute income to them without needing to change anything.