if i take out an investment loan in the name of a trust do i need the property i put up for the mortgage to be in the name of the trust
Liz2005
Yes, you could have a loan in the trusts name and a security in your personal name.
However, it wouldn’t make much sense from a tax perspective. Run this past your accountant.
Cheers
Stu
Stuart, you seem to be the man regarding Trusts etc. I was under the impression a Trust could not borrow. When you say “Trust’s name”, do you mean the Trustee’s name on behalf of the Trust?
Robert Bou-Hamdan
Mortgage AdviserHi Rob. A trust in not a legal entity so trustee borrows on behalf of the trust. However, essentially the trust is the ultimate borrower from a tax perspective. I just say “loan in trusts name” so I don’t confuse too many people.
Cheers
Stu
That is what I thought. How funny is it that in an effort to not confuse others, you confused me! Maybe it is the brain freeze from all the slurpees.
Thanks for clearing it up though.
Robert Bou-Hamdan
Mortgage AdviserOriginally posted by Stuart Wemyss:Yes, you could have a loan in the trusts name and a security in your personal name.
However, it wouldn’t make much sense from a tax perspective. Run this past your accountant.
Cheers
Stu
Stu
What about if a person had a unencumbered property. He then started up a trust and got a loan secured against this property in the trust’s name. You are essentially letting the trust use your personal equity.
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
Yer, that would work (as long as beneficiaries or directors and property owners are the same people).
This would be similar to borrowing the money yourself and lending to the trust at the same rate you are paying. It would be neutral tax effect personally (expense = income) but the money would be deductible to the trust (as long as the funds are used to earn assessable income).
Either way would work.
Cheers
Stu
Stu,
Could you actually charge the trust interest for hte use of the funds?
Cheers
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We are investing in NZ so if you are looking for + cashflow properties…contact: [email protected] to join our database.If you borrow the money in your personal name you could lend it to the trust and charge interest. The interest that you charge the trust would be assessable income and you could claim the interest you pay the bank as a deduction.
Kiwi, your signature is bordering on advertising. Can you tone it down a bit so that is not so blatant? Information such as occupation, website, email, etc are ok but yours goes too far. Thanks for your understanding.
Cheers
Stu
Hi there,
I have a question that needs to be clarified. When going for an investment home loan int the name of trust/company trustee, Do all the beneficeries have to be on the loan, or just the director of the company trustee? Can anyone help?
P.S I'm also going through the process of looking for Mortgage brokers to help us with structuring our loans, so please leave contact details. Thanks.
Looking forward.
It is a very good question.
In most cases No only the Trustee of the Trust or the Directors of the Company would be Guarantors but there are lenders that require Guarantees by Adult beneficiaries.
Not sure what good that does them but they do ask.
Let us know what you are needing and I would be happy to assist.
Richard Taylor | Australia's leading private lender
Lilbigkev wrote:Hi there,I have a question that needs to be clarified. When going for an investment home loan int the name of trust/company trustee, Do all the beneficeries have to be on the loan, or just the director of the company trustee? Can anyone help?
P.S I'm also going through the process of looking for Mortgage brokers to help us with structuring our loans, so please leave contact details. Thanks.
Looking forward.
You have to be careful with the wording of the trust deed as some evil lenders will require personal guarantees from all named beneficiaries of the deed. This is completely unfair as you can name anyone in your deed without even having their permission and it is very unlikely that they will be willing to guarantee 'your' trust's loan.
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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