Very dangerous.

Make sure you get legal advice otherwise you would be just one of many unsecured creditors down the track.

What happens if someone dies and leaves a property with a loan on it to someone is that the testator may or may not deal with the loan in the will.

1. If they have other cash they may direct that the loan on 23 smith st be paid out of the residue of the estate.

or

2. If there is no mention of how the loan will be delt with then the loan goes with the property. In NSW this comes under the conveyancing act. If this is the case then the recicpient will have to take the property with the loan and will have to pay out the loan or apply for their own finance to continue the loan. If they don't then the executor may have to sell the house and distribute the proceeds to them.

There are also tax issues to consider such as when to sell and who gets taxed – the estate or the recipient. This will depend on the circumstances.

With trusts its different as ownership doesn't change. Beneficial ownership doesn't change, but if you are individual trustee of a trust and die then the title of the house etc must be changed. ie the legal ownership must change. There may or may not be stamp duty issues depending on how the trust is set up but should be CGT free.

If a company is trustee then legal ownership can stay with the company. Hopefully the deceased would have arranged for a suitable person to hold or control the shares of the company and the can then appoint themselves as director and control the trust.

But either way the loan on the property will have to be redone. Banks won't allow a dead person to guarantee the loan and dying would be a breach of the loan agreement so someone else would have to step in and guarantee the loan or the property may need to be sold.

many issues to consider.

If the member is in pension phase and the asset is being used to pay the pension then the SMSF won't pay any CGT when the asset is sold. If it wasn't in pension phase then 15% tax on income within the superfund including capital gains, but there is a 33% CGT discount for assets held longer than 12 months.

SMSFs can also negative gear – as in a loss on a property held within the fund can offset other income of the fund

If your wife is 100% title owner then she will get 100% of the income.

Since you will have $800k owing on the new main reisdence you would want to sell your share of the house to the wife and for her to borrow to buy it. She can then claim the interest against the income an then this will release funds which can be used to pay down the new main residence loan.

Its only $12 here

http://www.propertybooks.com.au/productdetail.asp?id=33

no guarantee!

You would have also have gotten you to tick a box before proceeding on the order, probably.

LMI can be added to the loan in some cases but it is still can expenses and will be paid for in full as the loan balance increases.

1putt, that is not true. Banks lend to trusts everyday of the week. Its no harder than an individual borrowing.

What you probably had trouble with was borrowing to buy units in the trust which is more difficult.

It depends on why you are doing it. 3 possible reasons:

1. Business – such as setting up a professional company which  will do this for others too

2. Asset protection – diverting funds legitimately to a trust

3. Taxation – dverting funds to other family members on lower tax rates.

If it is just a husband/wife sort of thing where you will end up diverting money to the trust and then only have the trust distribute to yourselves then there is no real benefit. You can claim a deduction but end up with income equal to the deduction.

Look up the Duties Act QLD