Hi all,
I would like to know how to set up the finance part of the trust that will be used for investment properties. My question is how can I claim the interest on the loan? Do I need to buy units or can i get a solicitor to write up a loan agreement between myself and the trust? Is there an other way?
Is this possible to claim the loan interest if the loan is in the name of the trust?
This is pretty complex legal information that you need to speak to a paid professional about about.
But as a general rule If you want to claim the property interest as a loss against your income purchasing in your own name is a lot easier then the alternative.
As wiko1 mentioned, you are talking about complex (but very good structure setup). I wish i could have done this before is started the property investment journey.
RPI on this forum can help you with information! he knows this stuff inside out!
To be able to claim interedt the borrowed money needs to be used for income producing purposes.
If you borrow money and gift it to a trust you cannot claim the interest.
If you onlend it to a trust you could claim the interest if it is a commercial transaction. That woukd mean charge the trust at least what you pay in interest. This would be income to you.
If you borrow to buy income producing units of a trust then you may be able to claim the interest depending on the set up and wording of the deed. You would have to be absolutely entitled to both income and capital of the trust to be able to Claim 100%.
Seek legal advice.
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
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