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Hi Ken
Not only that you will be paying more tax on the postive rents, the large mortgage on the new proeprty won’t be deductible.
Maybe you could sell you property to your spouse and free up money to put into your new loan. This would also increase your tax deductions dramatically. Weigh this up against the costs of stamp duty to do it, and possibly CGT.
This way you get to sell the property and keep it as well.
You could also buy hers.
Another option is to sell to a trust you control.
Terryw
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[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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Hi Crashy
Some lenders charge you for their legal fees. These are usually the smaller non bank lenders. This is because they outsource. The larger banks usually have their own legal departments, and include it all in one application fee. Sounds like you paid about $464 in legals and the rest was govt charges which you just cannot avoid.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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The trust would get all the rent either directly or from the proeprty manager. You would claim the deduction of interest against all of your personal income, and the trust would make distributions of the profit to you. The trust should be making a profit as the major expense, interest, is being paid by you personally.
If you pay yourself a wage, then you would have to declare it as income, so there may be no real point. It would be better, probably, to have hte trust make a larger profit so this could be distributed to one of the beneficiaries.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Why Redwing?
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Found the book i was referring to:
Sham : How the Self-Help Movement Made America Helpless
by Steve Salerno
# Hardcover: 288 pages
# Publisher: Crown (June 21, 2005)
# ISBN: 1400054095Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
I’ve done a quick search on amazon.com and am unable to identify that book I mentioned. Would anyone else know the correct title?
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Yes, I beleive that, generally, you cannot claim the trip if you are only looking at purchasing. It would be a capital expense, and could be claimed, possibly, against any capital gain on the sale.
However, if you have a few proeprties already and are in the business of property investing, then there may be possibilities.
If you had existing properties down there, then that would be a different story.
ps. I am not an accountant.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
A few weeks ago I was looking for a book to read while stuck at Melbourne airport, and I came across an AMerican one on the gurus. I think it was called something like ‘guru busters’. There was a whole chapter on Anthony RObbins in there. I ended up buying a different book, so didn’t read it, but it was critical of the whole industry and may be worth a read if you can track it down.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Watchout for the taxman. Have you considered putting some distance between yourselves and the trust by having someone else rent the property from the trust (and you live in it)?
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
There was a case last year where someone in VIC was ivestigated and found not to have lived in the property for which he claimed the FHOG. He appealed against the decision and lost. He was ordered to repay the FHOG, but nothing was mentioned about the stamp duty discounts.
I think I made a post about this on this site somewhere.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
try http://www.pmigroup.com.au for PMI.
http://www.pmigroup.com.au/locationwizard.asp?attractor=4Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
You would either have to gift money to the trust or loan money to the trust.
Whichever way you chose could have asset protection implications. eg. if you lend money, then go bankrupt, the money loaned is still your asset. If your money is gifted, then it may be safe – depending on when you gifted it etc.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Don’t worry too much. Negative gearing only lasts for a few years. With rising rents, the property will eventually become positive and then she will be saving tax by having it in the name of the lower income earner. (Assuming things stay the same).
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
You can’t negative gear in a trust. Losses cannot be distributed, so it probably wouldn’t work.
If you had a hybrid, it would be a different story and the unit holder could go for the tax reduction.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Possibly
Tony Cordato, Cordato Partners http://www.businesslawyer.com.auTerryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Anne
I understand what you are trying to say, and think the others have missed it.
The idea is to guarrantee the loan, then setup a new structure when your borrowing capacity maxes out, not telling the new bank that the same person has guarranteed loans for the previous structure.
Will this work?
Maybe. If the new lender does not ask about guarrantees, then you are not lying. However, you CRAA would clearly show the previous applications as inquiries and therefore they would more than likely ask..
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
There are also a few other mortgage insurers, however most don’t like things this small.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
I beleive that buyers agents fees are a capital expense, and therefore are not claimable at all – except gainst capital gains when you sell.
Any fee you borrow to pay for that is for investment purposes should still be claimable.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Originally posted by carl_vic:A trust doesn’t have shares so I’m assuming that the structure you’re talking about involves a company at some level. Is the company the trustee for the trust or a benificiary of the trust? It sounds like the company is a benificiary of the trust and you are trying to access income from the properties by the company paying out dividends to you, is this correct?
As far as I’m aware, if the company is distributing profits from a previous year, which have already been taxed at 30%, then you as the shareholder will recieve franking credits to reflect this, and not have to pay the same tax again. I.e. if youre in the 30% tax bracket you pay no tax on the dividends, if you are in the 42% bracket you might pay 12% etc. I’m not an expert but that’s how I understand it.
Carl
I think you misunderstood the question. Lupus seems to want his/her trust to own shares (eg telstra, qantas etc).
As far as I am aware, the franking credits of shares etc flow thru to the beneficiaries. There may also be issues with Family Trust elections when the dividends are over certain levels per year.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
I beleive only the owner can claim the interest. The other person is not on title, therefore not an owner and receives no benefit. I think this is covered in the ATO booklet on rental proeprties.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
