I am not sure. Companies do not pay CGT. Any capital gain is just taxed at company rates – 30%. Individuals get a 50% reduction in CGT if the asset is held more than 12 months – so the tax would be around 25% if on the top tax bracket.

With trusts the income and/or capital gains is just distributed to the beneficiaries. Having a corporate trustee may mean that the 50% discount is not applicable, but from my understanding I beleive that they CGs would just pass to the beneficiaries who then pay tax at their own rate.

I may be wrong (I do not have a corporate trustee for my trusts).

Terryw
Discover Home Loans
North Sydney
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BTW, leapfrogging is a term used by Peter Spann to describe his technique of buying, renovating and using the equity built up in the property to buy the next one and repeat the process.

Terryw
Discover Home Loans
North Sydney
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You must remember that properties were very cheap ‘back then’. If you have two couples on good salaries and they are saving everything possible, then it won’t take long to save 20% deposit on a $40,000 property.

Once you get a few, prices start to rise and you have access to the equity…… These properties are probably worth $150,000 now – about 3-4 years later.

And getting a large deposit from wrappees…..

Terryw
Discover Home Loans
North Sydney
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Arb

Interest on the current debt should be deductible. If a PI loan then the interest component would be deductible.

But if you were to increase the loan, then this would only be claimable if the money was used for business purposes.

Terryw
Discover Home Loans
North Sydney
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Hello Amz

Since your company appears to be making money, you could possibly transfer shares in the company to the trust and then distribute profits into the trust with the income offsetting the other negative gearing. But this may be a bit more complex as the company may be distributing franked dividends – so best to talk to an accountant.

Terryw
Discover Home Loans
North Sydney
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Wrappees generally try to cashout as soon as they can, -getting finance with standard lenders at much cheaper rates.

Also it is generally cheaper to rent than purchase for everyone – not just wrappers. So most people are looking at getting into the market and getting a hold on some of that capital growth.

Terryw
Discover Home Loans
North Sydney
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Major regional centres may still be OK, but watch out for the smaller towns.

I think you should not be buying based on yield alone, make sure everything else stacks up.

Terryw
Discover Home Loans
North Sydney
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As far as I know, no banks will lend for wraps, so you might as well go to a specialist lender such as the above.

Terryw
Discover Home Loans
North Sydney
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Another point.
If your loan on your PPOR is currently small, then you might be paying tax on your rental income as this will probably be cashflow +ve.

But your new PPOR is likely to have a large loan and hence, you will be paying large amounts of interest which is not claimable.

Terryw
Discover Home Loans
North Sydney
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