Yes it would be legal. But you would have to pay tax on it. but she is probably paying tax anyway. It would look good for your next loan application too>

Terryw
Discover Home Loans
North Sydney
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Troy

if you trust is the shareholder, then the $200,000 could go to the trust as a dividend payment. The trust pays no tax if the money is distributed, so if $50,000 went to yourself, then you would pay tax on this money. it would be added to your other income, so you may end up paying more tax than if you left it in the company.
The $50,000 used for property investment, this would have to be distributed to someone or some entity and they would have to pay tax on this. The money can be loaned to another company or trust, but tax would still be paid on the initial distribution.

this is my understanding anyway.

Terryw
Discover Home Loans
North Sydney
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I recall seeing (but not reading) a tax ruling on this subject too on the ATO site.

Terryw
Discover Home Loans
North Sydney
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Yes I would say it is safer to gift money to the trust. If you (or a company) loan the money and are ever sued, the person suing you could call in that loan. If a gift, then they probably couldn’t (depending on when it was gifted-if within 6 months of going bankrupt then you could be in trouble).

If the trust owns the shares in a trading company, then all the profits would go to the trust which could then distribute it at the trsutees discretion. If owned by individuals you don’t have this flexibility.

Terryw
Discover Home Loans
North Sydney
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It is really no different to getting a loan in your own name. Lenders will ask for a guarrantee from the trustee (or Directors of the trustee company).

The only additional information that the banks usually ask for is a copy of the trust deed.

Terryw
Discover Home Loans
North Sydney
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Yes. You can still treat it as you main residence for a period of up to 6 years, even if it is rented out. But you can only claim one property to be you main residence. It comes under section 118-145 of the Income Tax Assement Act (i think-from memory).

Terryw
Discover Home Loans
North Sydney
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Yes. The wrappees usually have to put down a deposit. Some people are able to use the FHOG as their deposit-on the cheaper properties.

Terryw
Discover Home Loans
North Sydney
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Lenders are usually conservative. So if you can’t afford it on paper, you are unlikely to get a conventional loan. However there are loans out there, such as private lenders, who lend based soley on the value of the property, not taking into account your income. So if you can still come up with deposits, you can keep borrowing.

Terryw
Discover Home Loans
North Sydney
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Caitlyn

At least sue them for the full 10% deposit!

Terryw
Discover Home Loans
North Sydney
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I don’t know what you mean by ‘creative finance’, but there are various things you can do. It really depends on what the house will value for. if it actually comes in at $230,000 you could still pay $230,000 with your parents gifting you $30,000. The bank would be able to lend you say 90% of $230,000 = $207,000. That way you would not need to use your other house as security (which would be cross collateralising).

You can only claim one of your homes as a PPOR, but can claim both for a limited period of 6 months. If you are living in your home, then it should be CGT exempt when you sell. But check this with an accountant.

Terryw
Discover Home Loans
North Sydney
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