Here's another Q for you all.
Family A fully own their home with no other loans except a loan on a IP that is +ve $100 week. Also receiving a healthy wage check with excess money to allocate.
Family A also has a PTY LTD structure with a IP loan. IP is -ve $40 week.
Where do you think the excess money should go?
To the personal IP loan which in turn leads to greater income and more income tax to pay?
'Loan' excess money to the Pty Ltd (or place in offset account) to pay off IP loan to reduce -ve cashflow (as less interest would be paid) to make it more neutral or +ve cashflow?
Your thoughts?
Karen
It would be hard to answer without knowing the circumstances.
I think it boils down to would the tax payable by family A be more than 30%?
If the loan of family A is paid they will have less deductions and therefore pay more tax.
If the company loan is paid down then the company will have less deductions and therefore more profit and more tax.
Maybe also need to consider the shareholders tax rates too.
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
Have you thought of company buying another ip house that will cost $100 a week to own resulting in net property income of zero.
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