Thanks Mr. Its best to know the correct answer, even though it hurts.
Doesn't seen fair though!

yes, avoid cross coll

LOCs generally have a slightly higher interest rate, so I would only use these for accessing equity. No point in using a LOC for the new purchase (the 80%) – just get a IO loan. A LOC would be ok, but only if you did not use it to put money in and out, just to pay the minimum in interest each month.

Ring the ATO again, twice more and you may get different answers. Also look at the PDF files at http://www.bantacs.com.au – i thnk htere is one called 'how not to be a property developer'

I don't think that is correct, the cost base of the new land should be the value at the date of creation. Assuming you have a house on it now, it should  all be CGT exempt (as long as its your main residence etc).

could be very dangerous for you. What if the work hasn't been done to the correct standards and the council ask you to demolish it.

You can only have one main residence at any one time. When you sub-divide you will have two properties, so from the date of sub division only one can be your main residence. Vacant land can't be a residence. I think the new land once sub divided will have a cost base of the value at the date of sub-division – but i may be wrong.

I am not sure about this – I am not an accountant

The trustee is the legal owner of the business so it would have to transfer portions of the business to the beneficiaries. I guess it could be done. There may be CGT implications though.

I think you accountant is wrong – or you misinterpreted what you where told.

Firstly trusts don't have directors, but trustees. If the trustee is a company, then the company will have a director.

Discretionary trusts are the best method of asset protection as no beneficiaries have any interest in the trust. This means if a beneficiary goes bankrupt the assets of the trust are not up for grabs – this is confirmed by the Bankruptcy Act, that assets held on trust are not available to creditors. of course, if you have to give personal guarantees, then your personal assets will be at risk.

A family trust is just a discretionary trust. The trusts beneficiaries will often include most of your relatives, whether living or yet to be born, even future adpoted chidlren etc, so it is very broad and flexible for tax savings. If you have no one at the moment, you could distribute to a company and cap the tax at 30% – soon to be 28% and eventually divert funds out at a later date.

If buying jointly, then too risky to use someone you don't know – what if they stop paying the loan = you will be left with it.

A better way may be a lease option type deal where they own it and you pay rent, with part of the rent going towards the price you will pay for the property.