It is possible to avoid CGT totally yet still claim all interest if planned carefully

renov8r wrote:

There has to be a loopol in the system somewhere.. This Can’t be impossible ! Surely someone has done it before.??

Lenders won’t be keen on these loans even if you had a job – short term soon to discharge. Brokers will not be keen as they have to give any commission back to the lender.

All you need is a stable income source – and dreams about income from flipping don’t count, need strong evidence of success

Just because you ‘subcontract’ doesn’t necessarily meaan you are a conntractor. There are various tests to pass from a superannuation POV and a tax point of view. There are also the legal side of things — you will need your own insurance for starters.

I’ve just set up a trust for someone with a child where he donated sperm and he doesn’t appear on the child’s birth certificate. He wanted the child to be a beneficiary and we did that by naming the child and also changed the definition of child to include artifically made children. This avoids confusion as there is legislation which means children created by donating sperm are generally not conisdered children of the donor.

further Benny’s comment, there are 4 broad classes of discretionary trusts. One with a closed class – so all beneficiaries are in existance and another with an open class which means future people can be beneficiaries – those to marry into the family and those to be born into a family. Also companies and trust later established can be beneficiaries

One strategy is to marry a vendor just to avoid stamp duty by becoming a beneficiary of their trust.

I am not sure what happens in practice. I am not an accountant and have never seen a beneficiary receive income of more than $416 pa.

In what circumstances would this arise?

Yes, you should get a private ruling.
What is the purpose of you capitalising interest this way? Only for a tax benefit in the future.

You are assessed on your taxabe income. That is income minus expesnes. if you end up with $20k taxable income then no tax would be payable.

I don’t know.
His loan is his business, but the lender could try to take possessio of the property and this could cause her to have to buy his share or to sell possibly. she should seek legal advice.

In most discretionary trusts no one beneficiary has any interest in the assets of the trust. So if a beneficiary were to be sued and end up bankrupt the assets of the trust are not property than can fall into the hands of creditors. An appointor of a trust may also be bankrupt yet the position of appointor is also not property that can be seized. If a trustee of a trust goes bankrupt then property they own as trustee is not property that is able to be seized.

The above is the general rule, but if you have transferred property into a trust it could be attaccked. If you have loaned money to a trust then that is still your money and will be available for creditors.

This is why the discretionary trust is the best invention since sliced bread! Anyone building up substantial assets needs to seriously consider using a discretionary trust as part of their family estate planning. But there are many issues with owning real property in a trust with the main one being land tax.

You need to speak to a lawyer about setting up trusts as it involves legal advice. You should also seek tax advice as there are many complex tax aspects to trusts as well.

Consider post ddeath testamentary trust – s102AG ITAA36.

It would be good for asset protection and you may be able to divert income to children who could then be taxed at adult rates.