You need to speak to an accountant, as if your trust has no other income, you cannot get negative gearing benefits – unless you are using a hybrid discretionary trust, and are borrowing to buy units in the trust.

Terryw
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maybe also check out http://www.chrisbatten.com.au

Terryw
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For some reading material on this, see:

Lawcentral.com.au newsletters

http://law.ato.gov.au/atolaw/view.htm?locid='TXR/TR20064/NAT/ATO‘

http://www.taxlawyers.com.au/Publications/New/TR2005_D15.pdf

Terryw
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Hi Kim
Sounds like you may have been to westpac?

You must have a hybrid discretionary trust??

Many banks have a problem with these because the title is in a name different to the loan. Some that will do it include: St G, Macquarie, Bankwest, ANZ (sometimes).

Which bank are you with?

If you hybrid is properly set up and the loan is properly set up most accountants are of the opinion that you can claim the interest against your personal income as you will be borrowing to buy income producing units in the trust.

If you take out the loan in the company name, then you will not be able to claim the interest, but the trust will.

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Yes, you can do it all yourself. I do all mine myself.

Annual running costs of a trust is just the accountaning/bookkeeping fees.

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Just chose a loan without high exit fees!

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A lot of people do seminars, but take no action. The presenter cannot be held responsible for this, surely?

Maybe it is like trying to lose weight. You can read a book, do a course, but if you don’t try, you won’t succeed.

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You can only claim one place as your PPOR at one time (except for a period of 6 months were you can have two to take into account the overlap between selling and purchase).

If someone is going to buy a new house to live in, they can chose which one to claim – usually the one that is growing the fastest.

if you are renting your property, the costs associated with it, icluding interest, can be offset against any income received.

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You have t be very careful with making a written offer.

In Australia contracts involving land need to be in writing (eg. CONVEYANCING ACT 1919 – SECT 54A).

There is no requirement for this contract to be a properly drawn out contract. As long as certain requirements are met (property identified, parties identified, and price = the 3 Ps), the contract could be binding if it is accepted.

There have been cases where these reqirements were written on the back of an envelope and it was a binding contract.

Actually, a contract for land can be verbal. However, if it is not in writting, it cannot be enforced.

for NSW see, http://www.austlii.edu.au/au/legis/nsw/consol_act/ca1919141/s54a.html

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I owuld be inclined to put off the payment of the HECS debt till a later date. Putting the money in a savings account won’t make much difference, but all that money oculd add up for a deposit on a house, helping you get into the market quciker.

There is also the possibility, tho slim, that the HECS scenario will change at a later date (eg. if Labour get in), they may abolish it, or change it so that you don’t have to start repaying it till you receive a higher income.

Also you may be able to keep your income low, and never have to repay it now. eg using companies, trusts, or working overseas.

A bird in the hand is worth two in the bush.

Terryw
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