Hi Don

We are about to knock it down and build a duplex. It is a bit too old. Beleive it or not, none of the units have a bathroom – just a toilet.

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A few years ago, a friend of mine purchased a unit in Shanghai, right in the city. It was positive geared from day one and since then has more than doubled in value. She reckons there are still some cheap bargins out there, but you have to be careful of the area as many places in Shanghai have already boomed.

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Hi

I beleive each trust has to be exactly the same as the original – otherwise the ATO may deem new trusts to be established.

You had better seek good legal advice on this. Brett Davies talks about trust splitting in his newsletters sometimes – and claims a 100% success rate i think. see http://www.lawcentral.com.au

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Hi Donald

Simon has answered, but I might just add that if you use a LOC for investment purposes it can still be promblematic. Every deposit you make is a repayment. So when you withdraw funds it will be classed as new borrowings.

If you only ever withdraw funds for investment/business purposes then the whole interest charged would be deductible, but it could be messy apportioning it between your various investments.

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I’ll have a go too, although I am also not an accountant.

1) the legal owner is the company (in its capacity as trustee).
2) Company
3) Company and/or trust
4) Yes
5) ? probably trustee but I don’t think there would be GST on residential property
6) Company as trustee – company would not have to lodge a tax return, all money is thru the trust
7) I don’t think there would be GST on residential property
Yes
9) If you are trading, then there would be no GCT, only income tax.

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Cata – how can someone do a search on a trust? Trust deeds are not stored anywhere or registered anywhere. Sometime people lodge copies at the Land Titles Office, but this doesn’t appear to be a requirement. The Office of State Revenue doesn’t keep a copy, they just stamp the deed and hand it back to you.

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Hi

I think you will have a difficult time finding finance intially as you will be on probation, and then on a contract in a new job.

Have you considered buying in Thailand? You can probably get finance there if working in the country.

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I’ve had conflicting advise from various accountants on this. Many have argued that interest on interest can be deductible if the money is borrowed for business purposes. One described it as a common practice for business to borrow money to pay for interest – to help cashflow.

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Carl

I think there are problems in some states with signing a contract before the trust is established. I think WA’s state revenue office is particulary fussy about this and has charged people stamp duty twice if not done correctly. Other states SROs may be less strict in enforcing this.

If it was me, I wouldn’t be taking the risk.

As for your idea of using an existing trust, I think you will find it hard to settle without changing trustees unless you are paying cash for the property. I cannot see an existing trustee offering to guarrantee a loan for you.

Also be careful with outdated trust deeds.

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Both Coasty! Unfortunately, i am back in Sydney now.

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