After the recent sale of an investment, I will soon have a reasonable amount of money to re-invest.
I am currently thinking about setting up a company to invest through, in partnership with my wife and son.
We currently have a standard mortgage on our PPOR, and I would like to re-organise the loan with a mortgage offset account or something similar.
My question is, can I have a Mortgage in my name, and an offset account in the company name?
Or is there some other way to do it?
Dino
“If you don’t know where you are going, every road will take you there.”
Dino
Why do you not pay that money into your PPOR, to reduce non tax effective debt, and re borrow to either lend it to your company, or to purchase the shares.
BTW, I would not buy appreciating assets in a company. have you thought of setting up a family trust, with a company as trustee? It’s sort of the same, only better income splitting and tax advantages using a trust.
Cheers
MelMel
Re – structure, I don’t know all the ins and outs yet, but from what I hear, the trust structure seems to be the way we will go.
As for the loan, my understanding is this.
First of all I will put the money in my PPOR loan, then re-borrow it to give to the company/trust. This makes the interest on the borrowed amount from the house loan tax deductible.
The money given to the company along with any income generated from investments or other sources will need to go into an account somewhere until it is used.
Having this account linked as an offset to my PPOR loan helps me to pay it out faster.
Am I just going around in circles, can I do it, or am I missing something?
Dino
“If you don’t know where you are going, every road will take you there.”
Dino
Offset accounts must be in exactly the same names as the loan accounts (Something to do with ATO regulations).
I agree with Melbear pay off your home loan and then borrow – which sounds like what you were planning to do.
But check with an accountant about gifting money to a trust. This may be a good idea from an asset protection point of view, but if it is a gift, you may not be able to claim the interest. If you loan the money to the trust you should be able to claim the interest, but if you are personally sued the trust technically owes you money so creditors may be able to call in this loan.
Also check this, you may be able to park your trusts money in your personal offset account until it is distributed-saving you interest on your PPOR.
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
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