Sam, if there will be no capital growth then why bother?
What is the annual return like after all costs?
Could you get similar returns with less risk?
What is the opportunity cost of investing in this?
– borrowing capacity eaten up
– deposit eaten up (and may be a large deposit).

You could claim depreciation

Well they are the owners of the property – this can’t be undone. There may be ways to minimise future effects though.

If one joint tenant dies the survivors share automatically increases.

Without proof of expenses they will pay more CGT. for CGT purposes JT owners are consider owners in equal shares as tenants in common.

Convert the existing LOC into a term loan and set up a new LOC. If you are worrried – do them in separate applications, with the new LOC after the approval of the conversion.

Is it owned as Tenants in common or joint tenants?

The siblings will be up for CGT on the transfer of their shares. Changing title now will also result in stamp duty as well as CGT. To work out the CGT payable they will need access to the records so they can use expenses paid to reduce the CGT payable.

Whether they should transfer title now or…[Read more]

Sounds like she would fail the control test – s1207v(2) Social Security Act
And the source test s1207v(3)

http://www.austlii.edu.au/au/legis/cth/consol_act/ssa1991186/s1207v.html

So that would mean the trust assets would be attributed to mum s 1208E

The trust property would also be subject to CGT and land tax possibly.

Have you considered…[Read more]

This may be better from a tax point of view, but from a social security point of view she won’t pass the control or the source test. The deeming rules may apply to the gift too.

Also from an estate planning point of view this set up has many disadvantages.

Did you get advice before this was done – did she get advice before gifting all her money away?

Costs me about $500 or so for the ASIC fee I think. But you also need insurance, credit ombudsman membership etc

A deed of partition could possibly be entered into so that each party beneficially owns just the part of the property that they take possession of. Tricky though

What is the source of the money in the first trust?

It can be done, but it depends.

But another thing is – if it can be done, that doesn’t mean it is a good idea.

I would have done it differently.

If there is no income then no expenses could be deductible – basic tax law s8-1. If she pays under market rent then expenses claimable would be…[Read more]

The trustee would be providing a benefit to one beneficiary at the expense of other potential beneficiaries. This may or may not be ok depending in whether the deed expressly allows it. Living there on below market rent would be a benefit.

How did another trust gift money – this would be unusual. If it was income then the income would be taxed…[Read more]

Yes there would be issues – a non resident trust would be taxed differently to a resident trust. Residency may be decided on where the trustee is located and/or where the central management and control is. Also a company must have at least 1 resident director.

I don’t know much about this area, but Paul at PFI would.

1. Is regional a good idea? What has the growth been like in the past?
You could be going back wards if no growth, and what is the opportunity cost?

2. That would just be a general comment. But the more you look at the better a feel you would get.

3. I charge $660 for a 2 hour meeting to discuss structures, strategies from a legal, loan and tax…[Read more]

Connective is the best. I was with them, left, but have now gone back.

This is actually great thinking New Timer – well done.

You can do that, but would the LMI be deductible? I don’t think so because it was incurred because you increased the loan to buy a new PPOR – a private expense.

However, You might be able to argue that the LMI relates to the whole loan and at least part of it will be deductible.

If they were stand alone you would not have had this problem.

Borrow any extra $80k from the PPOR as a separate split.
Use your cash as deposit to avoid LMI if possible
Borrow 80% of the new property, IO with 100% offset

Quickly convert the existing loant o IO with offset if you can.

Until you move keep all cash in the offset of the existing home.
Once you move take your cash with you to the new home and…[Read more]

Depends what they are for. If the accountant is a tax agent and they relate to your tax affairs then generally they are claimable.