Am i wrong in thinking. Person A, B and C have signed personal guarantees. Net loans in the trust 1.5 million all for investment purposes. Person A then wants to go off and buy their own PPOR or do their own individual borrowing in another trust or in their own personal name. Their income is only 75k but the group total income was 250k.

Does this then mean that if your using the same bank they will say… You have given a personal guarantee for 1.5 million your income of 75,000 is not enough to service any future loans.

Is this avoided by going to another bank. Cant remember i have ever been asked if i have given a personal guarantee for another trust

thanks wilko

Hi Terry,

Thanks for your reply. Just to be clear, I haven't yet mixed my 8K with my home loan offset.

You've said

Strictly speaking what you have done has created a mess. Interest wouldn't be deductible because you borrowed money and placed in a savings account. However ato may not be so strict and may allow the dectiin if you can clearly trace the funds.

I quite don't understand this, I understand that I borrowed money and place it savings account(offset), but this was brand new offset account created on the same day when 90K was drawn and only linked to this 90K loan, ,on the same day 32K was given to agent and it had 90K-32K sitting in it for 40 days. On 41st day I used the rest of the money from this offset for my final settlement and at the end of that till now it has 8K sitting in it offsetting my 90K initially drawn. These are the only transactions (both transaction for investment purposes) happened on these offset account.  is this still incorrect method?

Mixing borrowed money with not borrowed will result in even more mess. It will cause the original loan to be a mixed purpose loan and any subsequent repayments must come off each portion.

I Agree on this 100%. The 8K left on my newly created offset account which is offsetting my 90K loan is my problem now, not really sure where to park this money (as i want to close my offset account) . My Accountant has suggested that we take this 8K and put in my Home Offset and in tax time we'll proportionate (deducting) interest on 8K before filing return.  The only way i see out of this is to leave the offset with 8K open unless you think proportionating 8K interest every year should not be an issue from ATO point of view. I am going to use this 8K in future only & only for investment purposes if the need arises otherwise it will be sitting there for good.

Apologies if my questions are repetitive, i need to advise my account which way i should progress and i want to get my head around this.

thanks

S0805

LOCAL COURT ACT 2007 – SECT 39

Appeals as of right

39 Appeals as of right

(cf LCA 1982, section 73)

(1) A party to proceedings before the Court sitting in its General Division who is dissatisfied with a judgment or order of the Court may appeal to the Supreme Court, but only on a question of law.

(2) A party to proceedings before the Court sitting in its Small Claims Division who is dissatisfied with a judgment or order of the Court may appeal to the District Court, but only on the ground of lack of jurisdiction or denial of procedural fairness.