Many offer free redraws, so you can put your money in and take it out, just like a LOC, but without the cheque book.

Or

Many offer 100% offset accounts. So you could withdraw some funds and store them in the offset, get a cheque book attached, and use the funds from there. You would only pay interest on the loan less the money in the offset, so it should work out the same. it may even save you some $$ as many lenders charge more for the LOC.

I can think of a few disadvantages:
– Companies do not get access to the 50% CGT discount
– Asset protection (but shares could be held by a trust)

Advantages
– May be able to sell the shares of the company rather than the property with the purchaser avoiding stamp duty
– Easy for several people to own one property by owning shares in the company
– Limited liability if the company is sued (eg. injured tenant)
– Keeps things clearly separate from personal

Trakka

I've given you my opinions. Now why don't you just ring up a few lenders and ask them over the phone. Also grab a few loan application forms and look at what they ask.

Just looking at a St George application, they ask for assets and liabilities and ask "What you owe". I cannot see any specific question asking "have you guaranteed any loans". So it may come down to an interpretation of the word 'owe'. I would take it to mean liable for any debts. Guarantors are liable for the debts they guarantee – are they not? Maybe I should email them and ask the specific question?

You shouldn't be trying to do this without the use of a solicitor. Who told you that subject to finance clauses are not possible? (probably the agent?). You should be able to make the agreement subject to whatever you like if the other party will accept the condition.

I have had a few of these and they got through ok.

Excel is the only one for me!

If the lender doesn't ask about it, then I guess you are not doing anything wrong. But it is highly likely your lender will ask about these other loans as they will see them on your individual credit report.

And here is the web site for the Trust Structure Guide. Have a look at the menus, including the flow chart:

http://tsg.taxinstitute.com.au/

BTw, it is only $250.00

A trust is a relationship really. Discretionary trusts are set up with a trustee, who is the legal owner, owning property for the benefit of the beneficiaries, who are the beneficial owners.

Just think of Dad starting a bank account for his little kid. The kid is too young to sign, so the dad has the account in his name. He is the trustee, but the kid is the beneficiary = the real owner.

It is a bit different with a unit trust as the trust is made up of unit holders, like shareholders of a company – each owns a percentage of the trust.

Discretionary trusts are different as the beneficiaries are a potentially very large group, none of whom are absolutely entitled to anything. They only receive income etc at the trustee's discretion (which can vary from year to year).

Hi Chris

Sounds like you have been misinformed a bit there.

If you have held a property for 12months or more you should be entitled to the 50% reduction in the capital gain. This doesn't mean 50% CGT, but the amount is halved and this is added to your income – so the max you would pay is half of the top tax rate plus medicare = 46.5% X 1/2 = 23.25%. (This is for individuals, companies would pay 30%).

Then, to get use of the 6 year rule to avoid CGT altogether, you have to live in a place before you can class it as your main residence. So any time prior to that where the property is rented out will attract CGT. Once you live in it, and then move out, you may be able to claim it as your main residence still, but you can only claim one main residence at a time – except for a 6month overlap period where you can claim 2.

The law doesn't state how long you need to live in a property to class it as your main residence. The ATO has put out a ruling or a Interpretive Decision on what they look at to determine whether a place is actually someones main residence. They look at various factors including how long a person lives there, where their mail goes, address on licence, electoral roll etc.