If partner very adverse to risk then one option is to set up separate SMSFs and to use your fund to purchase and to select a lender which does not require a personal guarantee. I dont' think you can really get safer than that.

Another option is to use a discretionary trust and to keep your partner out of giving guarantees or going on the loan etc. Even one in your own name. This way if something does go wrong then only yourself would be at risk.

Both owners of the existing house would have to go on the LOC secured over that property however.

Many trusts offer these same advantages.

For example to avoid vesting, just set up a company trustee and trust in South Australia. Wait 80 years and see if it works.

Income tax and GST.

New means up to 5 years old. So if you construct and rent it for 4 years and then sell GST may still apply to the sale.

The substantially bit isn't defined in the GST Act, but there is an ATO ruling which outlines their view.

No, it wouldn't include principle as as this th $301,000 that you are paying back. But it would include interest.

Beneficiaries get sued all the time. But if the trustee gets sued then it won't affect the beneficiaries.

I think you need to seek some legal and tax advice about your particular set up as there are many other issues to address.

$1500 pw = $78,000 pa

To get $78,000 pa on a rental yield of 4%:

= $78,000/0.04

= $1,950,000

So you would need about $2 million worth of unencumbered property to get $78,000 before tax if you were getting a yield of 4% after paying costs.

Yes, don't have a trading company as trustee.

You could have two trusts with separate trustees. One trust could own the assets and one trade. This is what they call a service trust and it is a way to divert profit from teh trading trust which is higher risk of being used. The trading trust would pay the service trust a fee for the use of the assets and this would be a deduction to the trading trust. This would divert income to the second trust, the service trust which would then use it to offset the deductions from depreciation.

I

Still not sure what you mean about offsetting business income. But a trust earning $100,000 in income with a $20,000 deduction for depreciation will result in an income of $80,000. So instead of getting $100,000 income to distribute you have $80,000 hence you have still reduced your income of the business.

This would depend how you do it.

If you transfer for under market value or reduced consideration then the claimback period is 4.5 years from memory. But if you do it with the intention to put the assets out of the reach of creditors – such as for asset protection reasons – then there is no limit on the clawback period.

You also have to consider the practical side of things. Is a trustee in bankruptcy going to come after you for this at all in say 6 years for a transaction that was valued at say $50k?

This wold depend on which state the assets are in and what assets they are.