There are a lot of consequences that flow on from whose name goes on title.

If you put it in the name of hte highest income earner you may save more tax now, but what about long term? The property will make a profit eventually (hopefully). There are also other factors such as what if that person is sued – you could lose the house, whereas if it was in both names you might only lose half. Land tax is another issue, especially in NSW.

No need to change the will, they can be set up after death.
see http://www.taxlawyers.com.au/manuals/PostDeathTrusts.htm

re my post

Using a simple example.
You have a $100,000 loan, $10,000 in cash. You pay interest on $100,000 and cannot claim this.

You then buy a $100,000 property.

scenario 1. use your cash
You now have 2 loans. $100,000 for the original house, paying interest on $100,000 which you cannot claim (personal use).
and, $90,000 on the investment. You can claim the interest on this loan.

or
$100,000 loan. repay $10,000 into this loan and then reborrow it. Your loan is now split into 2. original loan is $90,000 you still can't claim the interest, but it is now less.

Loan 2 is $10,000
Loan 3 is $90,000.

The interest on loan 2 and 3 is both deductible if they are used for investment purposes.

Net result is the same in total loans, but you have increased your deductions by borrowing an extra $10,000 for the investment.
@ 7% this would be $700 extra deductions per year.

Imagine the figure for a larger amount – and the compounding effect.

For tax purposes a trust is a separate entity. So it will not affect your personal tax at all, unless you receive income from the trust.

Any losses in the trust will be trapped there and cannot be used to reduce your personal income.

I suggest you see a lawyer. The CGT exemption for PPOR only applies to a max of 5 acres I beleive. So possibly the best way to hold it may be a discretionary trust – but in NSW there is no land tax threshold for discretionary trusts. There is for some units trusts, but it is a bit complicated as there are also different rates for rural properties.

1. Yes both stamp duty and tax on the transfer of shares – assessed on market rates too.

2. Yes. Transactions done with the intent to defeat creditors can be undone – no time limit. If you were to go bankrupt then the transaction could also be undone for up to 5 years if there were no intentions to defeat creditors.
If you borrow on it and gift it then the interest on the loan will not be deductible too.

Why not look at setting up a testamentary trust from the beginning. These may be possible even if the will did not allow it. This would be the safest way and the most tax effective too.

One lawyer is advising that some banks are arranging SMSF loan documents which could result in doubt CGT being paid – so it would certainly pay to get independent legal advice before signing any loan agreements.

Yep, it should be fine. Sometimes there may be higher rates if you have a company as trustee, but it will depend on the bank.

could be as high as 12 to 14% too.

You can set up a unit trust with any number of units in any amounts – 2, 100 or 1000 etc. They are good for 2 non related parties to invest because the profits go to the unit holders in proportion to their ownership.

eg 100 units, with 5 owned by Ted and 95 owned by Bill. Ted owns 5% and will get 5% of the profit.

Unit trusts don't usually have appointors – the person with the most units controls the trust, but this will depend on the wording of the trust.

They also offer no asset protection as the units are property and at at risk if you are sued.

But the units can be owned by a discretionary trust.

So if Bill and Ted were to invest using a unit trust with 50 shares each, they could each set up their own discretionary trust. Any profit would be distributed 50/50 into each person's Discretionary trust and from their the trustee of that trust could distribute it to the lowest income earners saving income tax. The important thing is each family unit can treat their own profit separately.