Forums / Property Investing / Overseas Deals / Using overseas trustee income for investment in Australia

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  • Profile photo of Jcam92Jcam92
    Participant
    @jack-shepp
    Join Date: 2017
    Post Count: 17

    I am just starting out in property investment in Australia and doing some long term planning. I will be moving to England for work and family reasons in two years. I want to know if I begin investing in Australia via trust structures:
    1. When I move to the UK, can I use my income in England to act as security against investments I make in Australia through the trust to continuing building my portfolio in Australia.
    2. If this is the case, what strategy would be recommended for an overseas investor that can only spend a finite period of time in Australia reviewing new investment opportunities.

    thankyou

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 11,992

    Hi Jcam

    Probably going to need 2 Years Tax UK Returns for a lender in Australia to accept the income for servicing.

    Cheers

    Yours in Finance

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
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    0-40 Properties in a decade with a unencumbered portfolio value in excess of $40M. Ask me for a copy of my API Interview.

    Profile photo of TerrywTerryw
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    @terryw
    Join Date: 2001
    Post Count: 16,110

    Get some advice on structuring the trust as there could be some issues with it being controlled from overseas. legal and tax consequences.

    Terryw | Structuring Lawyers / Loan Structuring Pty Ltd
    http://propertytaxbook.com.au/
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    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of Jcam92Jcam92
    Participant
    @jack-shepp
    Join Date: 2017
    Post Count: 17

    thanks guys appreciate it, I am ideally looking to start investment portfolio’s in both England and Australia as I will be splitting my time between the two, but would like to be able to expand both at the same time. Obviously the difficulty is I can only be earning a salary in one country therefore the issue of security for loans in the country I’m not working in seems a big hurdle and as you said controlling the trust from overseas. at this stage i am just trying to structure my long term plan, any resources or particular individuals you can recommend on the matter would be much appreciated.

    Profile photo of Jcam92Jcam92
    Participant
    @jack-shepp
    Join Date: 2017
    Post Count: 17

    Does anyone have any recommendations on a lawyer who specialises in international trust law, or someone who could be of assistance in the matter of controlling a trust from overseas?

    Profile photo of Corey BattCorey Batt
    Participant
    @cjaysa
    Join Date: 2012
    Post Count: 1,010

    I think you’re muddling terms a little bit. Income isn’t about security for lenders – but serviceability. Security is the asset which the loan backs – the location of this the lender cares about.

    Lets say you’re an Australian who moves to the UK and gets a job over there. You’ll be able to qualify for a loan in Australia for investment properties based on this income pending you meet all other requirements, affordability, deposits etc.

    Our office works with a lot of expats over in the UK – whilst there are some restrictions for overseas borrowers – it just comes down to getting the right advice on the right lender, structure product etc.

    Corey Batt | Precision Funding
    http://www.precisionfunding.com.au
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    Investment Focused Finance Strategist - servicing Australia-wide

    Profile photo of Jcam92Jcam92
    Participant
    @jack-shepp
    Join Date: 2017
    Post Count: 17

    thanks for that corey, yes I have got my terms confused, you are correct I was looking to use income earnt in england to service investments made in australia. Whats your thoughts on the above point raised about the trust being controlled by a trustee company that is overseas? I am a australian permenant resident but I am english if that makes any difference.

    also you say your company deals with a lot of this kind of thing, what are the tax consequences of not being in australia to earn a salary yet making investments in australia

    Profile photo of TerrywTerryw
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    @terryw
    Join Date: 2001
    Post Count: 16,110

    The tax consequences are vast and complex. An experienced tax lawyer or accountant would be needed to go over it. Expect to pay $900 per hour or more for this sort of thing. Not somethign that I would advise on because of the complexity.

    Terryw | Structuring Lawyers / Loan Structuring Pty Ltd
    http://propertytaxbook.com.au/
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    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of Corey BattCorey Batt
    Participant
    @cjaysa
    Join Date: 2012
    Post Count: 1,010

    thanks for that corey, yes I have got my terms confused, you are correct I was looking to use income earnt in england to service investments made in australia. Whats your thoughts on the above point raised about the trust being controlled by a trustee company that is overseas? I am a australian permenant resident but I am english if that makes any difference.
    also you say your company deals with a lot of this kind of thing, what are the tax consequences of not being in australia to earn a salary yet making investments in australia

    As TerryW has noted – you really need to get specific tax advice from an accountant/lawyer specialised in expat taxation arrangements. Otherwise you’re likely to be going down a path because you think its right, not because it was necessarily the best pathway/path of least resistence.

    As per overseas corp trustee – Australian lenders will definitely prefer to see an Australian Pty Ltd as the trustee over a foreign entity, so weigh this up in your decisions.

    Corey Batt | Precision Funding
    http://www.precisionfunding.com.au
    Email Me | Phone Me

    Investment Focused Finance Strategist - servicing Australia-wide

    Profile photo of Jcam92Jcam92
    Participant
    @jack-shepp
    Join Date: 2017
    Post Count: 17

    On a more random note, a query about serviceability in above mentioned trust structure, is an individuals credit rating taken into account when the salary is used to service investments

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,110

    On a more random note, a query about serviceability in above mentioned trust structure, is an individuals credit rating taken into account when the salary is used to service investments

    Yes. but which individual will depend on how the trust is structured.

    Terryw | Structuring Lawyers / Loan Structuring Pty Ltd
    http://propertytaxbook.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

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