Imagine this scenario:
I would like to purchase a property in a trust, where the loan for the property is also in the name of the trust (not in my name through the use of a HDT). The purpose for this is that I or a family member can then lease the property from the trust without upsetting the ATO (and without doing anything dodgy).
I realise that to negative gear any income this way, that income would also need to go through this trust. For argument’s sake lets say there is enough other income in the trust to make the exercise worth while.
In addition, lets imagine that the trust is new, and does not have any financials to prove that it can service the loan on it’s own. I’m assuming that to get the loan I would have to go guarantor on the loan, is this correct?
To make the situation a little bit more complicated, lets imagine that I already have other loans and that my servicability isn’t up to scratch. Can a low doc loan be done this way, i.e. in the name of a trust but with me as guarantor?
In addition, lets imagine that the trust is new, and does not have any financials to prove that it can service the loan on it’s own. I’m assuming that to get the loan I would have to go guarantor on the loan, is this correct?
The trustee has to be guarantor or if there is a company trustee then the director needs to be guarantor
Can a low doc loan be done this way, i.e. in the name of a trust but with me as guarantor?
I am not a broker but I can not see why not.
CATA
Asset Protection Specialist
[email protected]Carl
Yes it certainly can be done that way.
Some lenders will require the Trust hold an ABN for a minimum of 2 years which is obviously not going to be the case if the Trust is new.
Other allow the ABN to be registerd for 1 day.
If you care to email me more details i would be happy to point you in the right direction.
Cheers Richard
Ph: (07) 3720 1888
[email protected]
http://www.yourstatefinance.comIP funding and US property finance
our specialityRichard Taylor | Australia's leading private lender
I dont see the purpose in the trust itself borrowing the money rather than you borrowing it?
You then purchase units in the trust and the trust distributes income to you to repay the loan..
i’m sure you can do it as you suggest, but why?
REDWING
“Money is a currency, like electricity and it requires momentum to make it Effective”
Count The Currency With This Online Positive Cashflow CalculatorThanks for your input guys.
Redwing, if I hold the loan and purchase units, then rent the property from the trust myself, I loose the negative gearing benifits because with that setup the ATO will view the property as being used for private purposes. However if the loan is held by the trust and not me, I understand that this is not the case. I’m just trying to set up a 100% legit structure whereby I can live in my own investment property and still get the IP benifits.
Cheers
There would be no problem with getting the loan in the trusts name. Can also be done as a low doc if other criteria stacks up.
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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