in Australia there is no gift tax. So if your mother gifted you $300,000 there would be no tax on this. But there may be other issues such as centrelink benefits, asset protection and there may be better ways to do it from a tax point of view, so you should see a tax advisor.

Also you said the money was your inheritance, and your mum was just holding it – this means your mum is holding it as trustee for you and you are the real owner.

I meant to get a PPOR in your own name. This is the only asset you can get which is virtually GCT free. so you would be giving up a lot of profit to not have one. You can even rent the PPOR and have it CGT. This is why I think everyone should have at least one PPOR.

You could use all of your cash to get this and then to reborrow it. So the interest would be deductible if it is subsequently borrowed and used for investment purposes. You would also have a low loan balance which would mean the repayments would be much cheaper than renting.

It is legal and possible to rent a house from your own trust – but this would not be CGT exempt, nor possibly Land Tax exempt. Itis ok to do in the short term, but over time the rents would increase and your trust may end up paying tax on the rent you pay it – where if it was in your own name there would be none. Interest paid on the loan would be deductible to the trust – and the rent would be income. Also trusts cannot distribute losses.

The bigger the deposit you have the easier it would be to get a loan, but the banks must still make sure you can afford to repay it. They have a legal obligation to. So you will still need to show employment and income. Maybe you could go fulltime just before getting the loan and then change back again.

Never mind, the interest on $30k won't be too much. Just don't pay down any more.

i find it very hard to read capitals, so i only skimmed it.

Did you say you are casual? then how do you plan on getting finance for this?

I would suggest you also look at using a discretionary trust for asset protection and tax flexibility. This will also help with the getting of finance by allowing you to easily add people to guarantee loans if need be,

Maybe buy a PPOR out right, or as high LVR as you can and then reborrow it to invest.

size!

This would generally only be for those trusts with corporate trustee.

redraw = reborrowing.
deposit = repayment

Deductibility depends on the purpose the funds are used for.

ATO may never find out of course. They do sometimes send out questionaires to property owners asking a number of questions including asking if any loans have been increased.

Do you mean you will pay more interest for the loan with the offset? if not it may be worth changing. Your loan should be interest only too.

Do the sums, maybe it is worthwhile putting the money in an ING account in the name of a low income earning spouse if you have one.

Asset protection
Tax flexibility
Estate planning flexibility
Finance flexibility
easy to transfer control without changing title

i think i should have said "wear the losses"

If you are serious about investing then use a trust, even if it may cost you a bit extra in taxes in the early stages as the long term benefits will out weight the short term costs.

Discretionary trusts are the greatest vehicle to own appreciating assets. But they do have some disadvantages in the early stages. If you can get through that hurdle you will be laughing.

If he lives in it first before renting and later moves out it is possible to rent it out and retain the CGT for a period of up to 6 years. If he moves in again before the 6 year period and then out again the period starts  again.

If he moved in and then out and decides not to rent it but to leave it empty then he could keep it CGT free indefinitely.

There are a few provisos.

see section 118-145 ITAA 1997