Forum Replies Created
what is wholesaling?
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Terry, you were the expert until the last post :) I went bankrupt from 2011-2014, I lost the one property in my own name, the other 5 were not touched as they were bought in a trust so have to disagree there as I’ve been through it. Liquidator was worrels in Brisbane. But anyway, to make a video like that , maybe 6 hours script writing, 1-2 hours shooting and then about 7 hours editing… add another 40 minutes if I got to trim a bit for the firsT time like today :) and your still the expert I know what you mean by trust the other way round going personal.
Yes, I was probably not thinking about this sort of thing when I wrote the above. There are 2 aspects to trusts and asset protection
a) you personally become bankrupt
b) the trust itself is sued – the trustee actually.
If you personally become bankrupt assets you hold on trust are generally not available to creditors.
If you as trustee are sued your personal and trust assets will be available to creditors. But assets held in separate trusts would be generally ‘safe’.
So if you set up a trust, perhaps have a company as a trustee and give a personal guarantee, if the trust doesn’t pay its loan they could come after hte property used as security for the loan. If this is not enough to satisfy the debts the other assets of the trust, if this is not enough then your personal assets.
If there were separate trusts with also personal guarantees from you, the assets of these trusts would generally be safe.
if on the otherhand, you are sued for something personally, such as defamation or negligence then they generally could not get at assets held in a discretionary trust, even if you were the one that controlled it.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Buying in a trust won’t protect you either though. if you are the trustee you will be personally liable for the trust debts, the trust assets and your personal assets will be at risk.
If you have a company as trustee the company’s assets and the trust assets will be at risk. But the lender will want a personal guarantee from all directors so the directors personal assets will also be at risk.
BTW, how long does it take for you to make a video like that? I would think about 8 hours or so all up.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Like that article says they are very rare in Australia.
I have been a broker for over 20 years and have never seen a non-recourse loan for residential property other than for SMSFs.
They just don’t exist. There used to be some available for commercial property at around 30% LVR. Not sure if they still are.
Here is an article I wrote which explains that even with a loan that is not cross collateralised the lender can still come after the borrowers other assets.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
I think you might be misunderstanding what ‘non-recourse’ means. You might be referring to a loan secured by one property? A non-cross collateralised loan. This is different to non-recourse which means the lender only has the ability to claim against property held as security for the loan.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
You definitely “WANT” a non-recourse loan!
Why?
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Ok, I have watched the first video now and you mention move about non-recourse loans. Even where you have loans with separate banks if you default on one loan they can take the property secured by the mortgage and then if there was a shortfall they can then come after the second property, or other assets, even though they are not mortgaged. They will simply get a judgment at the supreme court to allow this to happen.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
I watched the 2nd video and it was pretty good. Love your acting.
But you called the bank the borrower when they should be the lender (usually) and I am not sure what you meant by “I don’t want a non-recourse loan”.
Non-recourse loans generally only exist with superfunds and these are loans where the lender’s only recourse if to the security property and not to other assets of the borrower. You can’t get them with residential loans, other than for super, but if you could you would surely want one!
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Thats like asking what the best food is. Ice cream – but not so good for breakfast perhaps.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
redraw means borrow more money, in this case up to the limit – until the loan term ends.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
This is not the case. There are no rates for CGT in Australia. The capital gain gets added to other income. It is also not financial advice when advising on capital gains, but tax adice.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
if it is the end of the loan term of course you would need to pay it back. This is just a loan like all of loans really.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
You will owe the lender the full amount plus interest. But won’t need to pay it all back until the end of the loan term
If you pay more than the interest you will be reducing the loan amount – but might be able to access it for redraw.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
say the interest is $20, you could repay $20.01 if you wanted to. Generally you will only need to pay the interest, with some lenders and products there is no requirement for that until the limit is reached. Interest will be capitalised.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Sorry, I can’t follow so best thing for you would be to get some proper advice
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
I don’t know what circumstances you are referring to, but it is possible to move back into the original main residence. You could even use the 6 year rule on the second main residence – whether you should or not will depend on the circumstances.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
once drawn, partially even, interest starts to accrue. Once fully drawn the same thing expect you cannot borrow any further or capitalise the interest
You would need to repay the interest each month and if you want to repay the loan pay more than the interest. No need for a new loan to repay it.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
you can only claim one main residence for the exemption for any overlapping period of time. Which one you choose is important because the other will then be exposed.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
most brokers could help with that./
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
You could eliminate CGT by claiming the main residence exemption, potentially.
Or use the cost base reset to market value at first rented rule and see how much CGT would be payable. It might be nil or very low.
Moving back in won’t help.
Get some specific tax advice.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
