Things are not always straight forward.

You could put your grandmother's $50k into your offset account – but there would be implications for her pension. She may still be assessed as receiving interest on the money even though she hasn't got it anymore. And if your property is an investment your tax deductions will go down, so you may pay more tax. Overall it could work out worse off.

if you did have a $100,000 loan and put $95,000 into an offset you would be paying interest on only $5,000. Nothing wrong with this in general, but whether you should do it or put the money elsewhere will depend on the situation.

Dean, sounds like you need a good broker.

I was typing while Richard posted – but we both wrote essentially the same thing!

I believe there has to be one director of the company at least who has the licence.

Since you are director you can have the bank accounts set up so that both signatures are required, or either, or maybe even a third party. Watch out for internet banking too – whoever has access can transfer money.

I am not sure about the trust account, probably on those qualified will be able to operate one.

Also I should warn you that being a director is extremely risky and is not really necessary in this case. Just having one person doing it would be preferable. Having 50/50 shares would mean there could be a deadlock over voting over certain matters – such as appointing directors maybe. You should have a clear method worked out what you do if one votes for something and the other against.

Also watch out if you are a director and you not active day in the day to day running of the place. You could be breaching the corporations Act by failing to take proper care and due diligence and if something goes wrong saying you didn't know about it may not be good enough for a defence.

Ideally I would suggest buying at least one property in personal names as you get the CGT exemption – which will be huge as values increase over time. But this one I would suggest should be in the name of the spouse with the lower risk so as to increase asset protection.

There after, ideally, in a trust, but again it would depend on the numbers. I just worked out buying the first IP in a trust in NSW may cost an extra $5,600 pa just in land tax. This and the inability to save personal tax on negative gearing could cost you an extra $10,000 pa in the early years. This is a huge amount.

But after you buy a few in your own name you will be paying land tax on future properties (once you have used up the threshold) and as rents rise you will not have a loss – from then on it is smooth sailing, unless the government changes the rules again.

Maybe it is easier just to invest in shares – no land tax, stamp duty or negative gearing issues (usually).

What about putting the rent up?

When you try they may come to you with a sob story about how their cat needs a heart transplant and they can't afford to pay the rent. Are you tough enough to say stuff the cat, or would you reduce the rent?

Hi Scha

I don't think its a matter of being too early – its a matter of how 'big' you want to be. If you want to be buying several properties, doing developments or running a business then you should seriously be looking at trusts (separate ones for each too!).

You cannot get much benefit from transferring existing properties or assets into trusts so you need to decide before you buy.

Also I think you misunderstand the basic principles of asset protection. Just buying something in a trust doesn't mean you are protected.

There are 3 ways, at least, that you are potentially at risk:
1) you will need to provide personal guarantees to get credit
2) you could get sued personally
3) you could find the trust is sued.

Doing a development would mean all  3 could happen at the same time!

Where you could get some protection is if you had one/several trusts and were sued personally and ended up bankrupt. The assets held in trust would generally be safe (depending on how it is set up etc)

Get it while you can i think. Policies and circumstances change.

Try IT 2385
http://law.ato.gov.au/atolaw/view.htm?Docid=ITR/IT2385/NAT/ATO/00001&PiT=99991231235958

for staters – Beneficiaries of a DT cannot claim expenses.

Also try thinking it through logically. X is a beneficiary of a DT.
-a)  If X borrows money and gifts it to the trust – Its a gift so interest won't be deductible.
-b) If X borrows and onlends the money to the trust. X could only claim the interest if X was charging the trust interest, otherwise it wouldn't be a commercial transaction.
-c) 'investing' into a trust (??) – there is no connection between borrowing and any income earning capacity or potential. X would be one of hundreds of potential beneficiaries and there is no guarantee if that X will ever get a distribution. Even if X controls the trustee there is still no guarantee X would distirbute to himself.

hi Ruth

Property held in trust for someone else isn't available to creditors if you are personally sued – usually.