Accessing LOC to purchase a property

1. Yes, if you borrowed to buy.
2. no
3. yes. You would have to lend the trustee the money. loan would need to be at a commercial rate if you want to claim the interest.
4. not enough info, but can be a good way to proceed. But there may be better methods.

Logan wrote:

Thanks Terry I’m learning a lot from you.
Just to clarify on no.3.Do I determine the commercial rate as it is a personal loan ? Because it would be a different rate to what is being charged on the LOC.I’m assuming that I wouldn’t need the paperwork & also charge myself the commercial rate if it was purchased under personal name?

You have to consider what the security would be for the loan. If the trustee is going to offer you a 1st mortgage then no reason why you would not offer similar rates to a bank. If it is an unsecured loan then a commercial rate may be a higher rate. But you would not want it too high as you are diverting income from the trust to yourself. You should get both legal and tax advice.

If you were using the LOC yourself then there is no lending from yourself to yourself but you have already borrowed from a bank and can then use these funds to invest. If you do it properly the interest should be deductible.