A SMSF can do a sub-division one way with borrowings – through a unit trust with one or more unrelated parties with the SMSF not controlling the trust.

The first thing you have to understand is a business is not a separate legal entity or tax entity so registering a name will make no difference.

Cattleya – many errors
Company tax is 30%
Land tax is state based. A company owning land in NSW will get a threshold of $432k if not acting as trustee.
Not sure what you mean about if you want the cash.
Directors liable for company debts in many cases. Worse case is director loses personal assets.
Your comments about claiming things are potentially dangerous.

Its a question of fact. If queried you will have to prove you have lived there as your main residence.

3. Try a lawyer for this as it is legal advice – Corporations Act. Tax agents can only advise on the tax aspects.
You will find the asic fee for setting up a company is something like $465 – plus the time for the advice and the administrative set up costs. Do you know the legal consequences of being a director of a company, how to structure a company, shareholder structure, land tax issues etc.

Get legal advice.

Nope. No minimum time listed in law. As long as the property becomes your main residence this section should apply – as long as the other requirements are met.

If your funds are in the offset account you can just withdraw then and the interest on the loan will increase. Providing this loan relates to the purchase of the property the extra interest would be deductible once that PPOR becomes available to rent.

s 118-145 ITAA 1997

True in certain instances.

If you rent the house out first it will always be subject to CGT – but the effect will be small if any.

Pete – good points but you have mixed a few things up. Gifts can be attacked even if they are made before death. This is especially the case with elderly. There are many ways to attack such a gift under the laws of equity. There is also the NSW law of notional estate orders under the Family Provision section of the Succession act. Any undermarket value transfer could be attacked if the transfer occured within 3 years of death. NSW law can apply to people living in other states if they have a connection to NSW.

A gift also doesn’t necesarily mean a life interest. These are 2 separate things. A person can give another person a right to reside in a property until their death (life interest), but they are not directly connected (to the gifting).

Nothing much is iron clad unless you sell the property and spend the money.

Phil wrote:

Hi Terry,

I’m just curious to know, how is the St George portfolio loan an unfavourable choice for investing in property from a taxation point of view? I’m guessing that as long as the equity is used to invest, the interest accrued can always be tax-deductible, even if the loan is secured against one’s own PPOR?

Phil

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The Portfolio loan is a great product, but it can be a disaster if used a certain way. Some advocate crossing several properties to get one big portilo and this can ruin retirement if a property is sold as the lender may use the funds from the sale to reduce overall debt with the bank. but the main issue is if you are using the LOC as a transaction account. Money going in and out and that could mean a large debt but none of it deductible. There is no possibility of an offset on the Portfolio (i think).

Best to avoid LOCS for the main loan and only use them to access equity.