Are you talking about USA finance. That term is not generally used in Aust.

If you have a LOC here the repayments are generally the outstanding interest each month

Some lenders allow this to be capitalised though.

They are not your assets if held on trust. You might control the trust and be a potential beneficiary though, but just remember this control is only temporary.

If you are paying money, even from a loan account, to the trust then that is something that will work against you in servicing – whether there are losses or not. You will also have some…[Read more]

Yes it would as it is your debt. best to have a company as trustee.

You would have an added issue too in that a trust is not a legal entity but is a tax entity, so could the trust claim the interest on your loan? I have a private ruling application in with the ATO at the moment asking this very question.

I also don’t understand what you are…[Read more]

Example 9
Trustee company owns property and suffers a court judgment. Lenders will no longer lend.

Solution
Appointor can appoint a new clean company as trustee.

Example 7
For a person with a credit blemish a Fixed Unit Trust could be set up to own property with person A owning the units of the trust and person B being the trustee.Person A would be the one with the blemish and once that disappears person A could become the trustee and the beneficial and legal interests would merge and the trust disolve -…[Read more]

Here is a copy of an article that I wrote back in 2016:

Trust Strategies to Increase Borrowing Capacity
Here are a few of examples of how using a discretionary trust can increase borrowing capacity.
Example 1

Trust is set up to own property. Property increases in value. But the director of the trustee has suffered a credit blemish and no…[Read more]

No one can can comment really. You need specific advice.

trusts can’t borrow as they are not legal entities, but holding assets as trustee can improve borrowing cap, if the trustee is a company. I have written about this on here before.

But will it be a main residence or a rental?

These days with low interest rates I think buying a main residence first is ideal because

a) you get a CGT free asset (potentially)

b) no land tax

c) owner occ rates

d) improved serviceability over time

e) ability to debt recycle into investments at lower interest rates

f) ability to add value

g) emotional aspects

h) because it might cost…[Read more]

You can actually have many many residences, but not more than 1 can be exempt from CGT for an overlapping period.

But the good part is that you can decide which one to count as your main residence for CGT at the point of sale of the first one. The strategy is to wait until the first is sold and then make an assessment at that point. In some cases…[Read more]

In that case the 6 year rule could reset as long as the property qualifies as your main residence.

But if you own another property you cannot choose both as the main residence for an overlapping period.

have you previously lived in the IP? If so the 6 year rule could be reset.

If not the 6 year rule could start from you moving in and out again.

I presume you did a AB search?

A trust is a private relationship, not registered anywhere. You need to find out who is operating the business. It can’t be a trust but would be a company or an individual who is acting as trustee.

If you do a title search it will show who the owner of the property is, but it will probably be leased to someone…[Read more]

No. It will hinder you as it is a debt.

Why do you need an investor?

I think you are conflating different things. The lawyer is not trying to give business advice when drawing up a deed, but giving advice on the legal issues.

An accountant might be the one to talk about for business advice, but they would need to be a registered tax agent to give tax advice and a lawyer to give legal advice such as who should play…[Read more]

I am not sure what your comment about “lawyers, in my opinion, usually run good legal practices (small businesses), but otherwise make poor accountants, business advisers, and financial planners.” means or relates to. We were discussing whether non-lawyers can set up trusts and no one claimed lawyers can act as accountants etc.

The fact remains…[Read more]

Since it is illegal for accountants to give legal advice, they shoud get the lawyer to set up the trust directly with the client, they can jointly advise if they want, but the contract would need to be between the law firm and the client. Otherwise no insurance coverage.

WHat happens in practice is an accountant will buy a deed template and fill…[Read more]

Tell me this Steve, would you let an accountant set up your will? Hopefully you would answer no.

If no, then why would you go to an accountant for a trust set up?