This is a complex question.

Once Joe becomes a resident here for tax purposes he would have to declare his interest in the trust over there and would probably have to pay tax on the income of the trust even though it is overseas. He needs good advice.

To start off here Joe could get a loan from the os trust or a gift – but again he will need advice as the ATO has introduced complex rules regarding trusts. He could find himself taxed on the loan as if it is income if not planned properly.

In Australia you must pay stamp duty on land transferred into a Trust, in all states I think. Shares no longer have stamp duty problems, but transferring shares may cause CGT to be payable by the transferor. If you want to introduce cash to the trust you can do so as a gift or a loan = each with different consequences for asset protection

HI Andrew

Generally no issue with using one LOC. As long as all interest is deductible you can just apportion it between the properties – even if you get the portions wrong the overall deductions should be the same.

Lisa,

I spoke to my tax man and he said there is not much they can do. Just try to obtain a valuation for as high as possible for the 5 acre portion surrounding the house as this would be exempt from CGT/

There is really only one way to reduce a loan and that is to get more money into it. Using an offset account will help too as your money sitting there saves interest

Hi Mark

Just think about it step by step.

If you take $100,000 out of your offset account what will happen to the interest on your house loan?
It would increase by about $7,000 pa.

Would this extra interest be deductible?
No, because it is a house loan for a private residence.

So assume you had paid the $100,000 into the loan. You would still pay the same interest as before – as when the $100,000 was in the offset.

Now you can reborrow that $100,000. Best way to do this is to set up a new loan to keep it all separated.
You borrow the $100,000 and invest it.

You would pay $7,000 pa approx in interest. But because this money was borrowed to invest the interest will be deductible.
This could save you about $3000 pa in tax.

There are no books that I know of that cover this sort of thing. Best to keep reading the forums I think

Lisa

You should get a professional,. I have a guy, ex ATO of 26 years. I will ask him if he could help.

Wiht a trust I was thinking you could sell at market values now quickly before the value increases and then you would have the trust sell later for a higher amount. But this may not be worth it unless there is a large increase in value.

Is the property a farm or being used as a farm?

If you have enough equity in another property, then you could port the loan over to that one. But I can't see the point.

You pay interest on the outstanding amount of a loan. So why not pay out the old one and take a new one when needed? It will be a lot of mucking around and the only benefits that I can think about are the savings in exit fees, but these are likely to be eaten up with other fees.

I would put all the money on the house and personal debts (and avoid the wedding! sorry!).

This will reduce non deductible interest. Then reborrow and invest.

Well, there is no way that I know of to minimise stamp duty on a transfer like this – other than to get a valuer and tell him the situation and ask for a valuation as low as possible. However this may only save you a few hundred.

I would do one per trust – but the costs start to add up $500 stamp duty on each trust is NSW now!

Sounds like you are unsure how trusts work. The company will be the trustee and legal owner of the property. You wouldn't transfer properties into a trust later on, but do it from the beginning. Otherwise you would pay CGT and stamp duty on the transfer. It is is a development definitely use a new trust.