Vardy – no. The ATO considers this a loan for a family law settlement and that the interest is not deductible. You should seek advice on getting the relevant portions right and then split the loan. You original 50% of the loan may be still deductible though.

If you can save tax and increase borrowing capacity then it may be worth considering.

You need to seek specific legal advice on this as too many variables. Which ownership structure will also depend on the state of the property too (NSW etc).

Get a power of attorney appointed before leaving. You can make it restrictive such as to only allow the attorney to sign contracts for purchase and associated documents. Check with your lender whether they will accept loan and mortgage documents signed by an attorney. Also look into the witnessing requirements for the state you are purchasing in.

ALJO wrote:

Is there any possibility of taking out a caveat on your property by a trust, when there is equity and not to mention the amount owes on the caveat. increase the amount as the property price goes up so if anyone sues you there is no money left in the property after paying mortgage and the other trust who put caveat on your properties.It may not be easy to figure out but it is a possibility

Yes. But how strong it will be will depend on how it is set up and documented. It will also be subject to the claw back provisions and uncommercial contract provisions of the bankruptcy act and conveyancing acts.

Great post Marcos.

Hope you made a large capital gain in that case ijc

1. apply for a loan with the same bank against your property. separate split, LOC best from a tax perspective. But to borrow money you will need to show income enough to service the loan

2. nope.

3. yes

4. only if you actually lodge an application. some allow valuations prior to this

5. If you can borrow enough againnst your PPOR then you could pay for the IP using these funds without the IP being mortgaged.

A trust will have a trustee, beneficiaries and property. Not sure what you mean by ‘holding company’ but a company can be appointed as trustee and/or as a beneficiary.

The income of a trust must be distributed or the trustee will pay the top marginal tax rate. If you are the trustee or director of the trustee company you can control where the income is paid to. Subject to the deed, the income could go to you or your family or to another company you control. There is no need to pay a wage.

If you own property in your own name then you would need to pay stamp duty and CGT to get it into a trust.

Trusts are legal devices and although many accountants set them up you really need a lawyer. A trust is just a relationship between various parties involving property and non lawyers cannot give advice in this regard as it is legal advice. If a non lawyer does set one up they will use a deed written by a lawyer, but you need advice to go with it.

Accountants or tax agents can give advice in relation to the tax aspects of trusts.