Don’t worry too much Anita. A hybrid may have saved you a little in tax however. Still better in the long run than holding them in your own name.

Terryw
Discover Home Loans
Parramatta
[email protected]
Sign up to my mailing list.
Just send me a blank email, with “subscribe” in subject line.

Hi MJ

This is a complex area which I do not understand. The area I was thinking of is Division 7A loan agreements. See http://www.lawcentral.com.au

Froma brief look, it may be only problematic if your company lends money to the trust and this trust later lends money to an individual.

Without these agreements, any money lent may be deemed a dividend, which may result in tax having to be paid.

Terryw
Discover Home Loans
Parramatta
[email protected]
Sign up to my mailing list.
Just send me a blank email, with “subscribe” in subject line.

If you have no other benefificaries with lower tax rates, then you can distribute to a company which will pay tax at 30%. Company can then hold the money and distrbute it to shareholders, or lend it out to the turst. But there are a whole series of rules relating to this, so you had better discuss it with your accountant.

With most trust deeds, you can set up a company down the track it and will be a beneficiary if one of the trustees has a role in the company – director, shareholder etc. So you may not have to set one up initially.

And the company does not have to be trustee for you to distribute to. In fact, it may be better not to for asset protection reasons. What if you build up a substantial amount and the trust is sued?

Terryw
Discover Home Loans
Parramatta
[email protected]
Sign up to my mailing list.
Just send me a blank email, with “subscribe” in subject line.

Still waiting for that reply from Bankwest!

Terryw
Discover Home Loans
Parramatta
[email protected]
Sign up to my mailing list.
Just send me a blank email, with “subscribe” in subject line.

Yes again. I suppose i should clarify. Fees for the preparation of your tax return should be deductible.

Terryw
Discover Home Loans
Parramatta
[email protected]
Sign up to my mailing list.
Just send me a blank email, with “subscribe” in subject line.

Yes, missed this one. The trusts can be converted, but with the fees it is probably cheaper to start a new one.

Terryw
Discover Home Loans
Parramatta
[email protected]
Sign up to my mailing list.
Just send me a blank email, with “subscribe” in subject line.

Virtually no bank will give out vals. CBA used to even have a policy of not telling you what it come in at!

However, ANZ allow the brokers to order and receive the vals.

All lenders do written vals too.

Terryw
Discover Home Loans
Parramatta
[email protected]
Sign up to my mailing list.
Just send me a blank email, with “subscribe” in subject line.

The main problem you will have is not being self employed for more than 2 years.

You may have to go for a No Doc loan at around 70% LVR with an interest rate of around 7%.

Terryw
Discover Home Loans
Parramatta
[email protected]
Sign up to my mailing list.
Just send me a blank email, with “subscribe” in subject line.

If you borrow more than 80% of the value, then you would have to pay mortgage insurance – usually.

80% of 320K = $256K. So if you increased you loan to more than this, then LMI is payable.

However, if you unit increases in value, so does this figure. ie 80% of the value.

You can also buy a new property without increasing your loan. You can use this property as additional security for the new one. (cross collateralising the loan). If this case you can borrow, in total up to 80% of the combined value of both properties without paying LMI.

Terryw
Discover Home Loans
Parramatta
[email protected]
Sign up to my mailing list.
Just send me a blank email, with “subscribe” in subject line.