Hi All,
I think I have made a mistake and would like some clarity on the following…
I have 3 IP Loans that service 2 IP's. These loans are in both my wife and my name however we have purchased the IP's in the name of our family trust i.e. "ABC Company ATF The XYZ Family trust".
I think this is going to limit my borrowing capacity as what I should have done was get the loans in the name of "ABC Company ATF The XYZ Family trust" and sign personal guarantees for the loans…
Is this right or am I just confusing myself?
Thanks for any advice,
Regards Andrew
It doesn't really make any difference. Future lenders will generally look at guarantees the same as having the loan in your own name – you have the same responsibility.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Terry beat me to it.
Didnt get back from walking my dog and dropping the kids to school in time.
A loan in your name or a Guarantee in the capacity as a Director or Trustee is still treated as the same liability.
Only concern I would have is trying to claim the interest expense in the Company when the loan is in your personal name but your Accountant should get you around that.
Richard Taylor | Australia's leading private lender
Thanks Terry and Richard,
I thought one of the major advantages of buying property in the trust name is that when I max out my borrowing capacity via the trust I can create a new company and trust structure and go again. Is this your understanding?
Cheers and thanks for your time,
Andrew
Thats just an old wives tale.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Very old wives and certainly not fact.
Richard Taylor | Australia's leading private lender
Thanks again Terry and Richard – Now I am confused – Can I address this question to Steve McKnight as well…. I was at Steves seminar on the weekend and I'm sure he said this was the case….I dont want to misrepresent him in case I have got this wrong but I would appreciate a response just to clarify the situation.
Cheers Andrew
Hi Andrew
Might want to try and do a search on previous posts as has come up many times before.
I think Steve has posted a correction to the interpretation many had got from his previous statement.
Richard Taylor | Australia's leading private lender
The only way it could apply is if the lender would lend to the trust without a guarantee. Over the years I have asked around and have yet to find a lender willing to do this.
Another way is to not tell the new lender about the previously guaranteed loans. Whether you would get away with it would depend on the wording of the application form and how stringent the new lender was in looking at the client's credit report. All enquiries for loans guaranteed will usually be listed on the guarantor's personal credit report.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
You must be logged in to reply to this topic. If you don't have an account, you can register here.
