They can’t. But a company they may control could pay them. Why do you want to pay yourself a wage? This is taxable in your hands. If you have a company that owns property and it pays you all the rent it will be the same, income wise, if you owned the property.
NEver heard of a bank charging for phone calls or faxes.
If they are fees charged by a lender then they possibly could be borrowing costs and claimable over 5 years.
Best to seek specific tax advice.
Sorry, you have sold your property. So these appear to possibly be fees in relation to the discharge of a mortgage and loan.
This reply was modified 9 years, 5 months ago by Terryw.
What you have said above doesn’t make sense. A trust cannot be a director, only persons can be directors. A trust doesn’t even have a director, but there may be a company which is a trustee of a trust. A trust cannot hold equity, but a trustee could take a mortgage over other property owned by others.
Not sure how this could leverage borrowing capacity though.
A person could rent a property owned by the trustee of a trust of which they are a beneficiary, but many issues to consider.
You’ve had advice from everyone except the lawyer. A SMSF can only borrow to acquire a single acquirable asset and the asset must be held on trust while there is a mortgage.
But you are talking about a unit trust being involved. Under reg 13.22C a SMSF can own units in a unit trust under certain condition, one being that there is no mortgage or encumbrance on the unit trust itself.
But if it is a widely held unit trust then it is possible for the unit trust to borrow – if it can find a lender. Your SMSF or associates can have no more than 50% (or 49%) of the units of the trust.
It is likely that the lender knew about the SIS Act, but didn’t know about the borrowing having a SMSF involvement.
If it wasn’t you one could buy 50% off the other and borrow to do so and claim the interest once rented out – it could be done with no stamp duty. But it may still be worth doing now – one buy the 50% share of the other so they become the sole owner, you just have to pay stamp duty. At least this allows you to increase deductions and keep the property.
If you had a $100k loan, non deductible, secured by the home you could set up a separate loan of $20k also secured by the loan.
You would then borrow $20k from the above loan and $80k from a new loan secured on the IP = 100% borrowings with no crossing of securities. Interest on both loans will be deductible against the IP income (assuming set up correctly).
You should never use $20k cash as you will end up paying more no deductible interest.