Viewing 14 posts - 1 through 14 (of 14 total)
  • Profile photo of andrew_dcandrew_dc
    Participant
    @andrew_dc
    Join Date: 2006
    Post Count: 7

    Hi all,
    I have bought my first IP and have been talking to an accountant re setting up a hybrid discretionary trust before settlement.

    The money I have borrowed is in my name (and that of my wife).

    I want to set up the HDT with me owning the units of the trust (to get the negative gearing benefit). Is this possible even though the money has been borrowed by both me and my wife?

    Best Regards Andrew

    Profile photo of Terryw

    I think it may be too late. If you have exchanged contracts and the trust does not exist, then you may have a problem – better check with a solicitor.

    If ok, you may need to get the loan to be redone. The title to the property will be in the name of the Trustee, but the loan needs to be in the name of the unit holder. The bank will also require a copy of the trust deed so they can have it reveiwed too. The loan shouldn’t be too much of a problem to change, but they may want to charge you a reword fee if documents have to be prepared again.

    Who will the trustee be and who is your lender?

    Terryw
    Discover Home Loans
    Parramatta
    Terry@discoverhomeloans.com.au
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    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of redwing

    Agree with Terry, Its most likely to late..the O&A would’ve been done in your name so you could potentialy pay Stamp Duty twice if you now put into the Trust..speak to your accountant

    “Money is a currency, like electricity and it requires momentum to make it Effective”

    Online Positive Cashflow and Renovating Calculators

    Profile photo of redwing

    oops..just re-read your post, maybe you need to speak to an accountant well versed in HDT’s?

    “Money is a currency, like electricity and it requires momentum to make it Effective”

    Online Positive Cashflow and Renovating Calculators

    Profile photo of cata

    Hi Andrew

    Terry is on the money IMOP.
    Structuring should be done prior to purchasing. This makes things easier. It may be better to keep this IP as is and structurefor your nextone.

    CATA
    Asset Protection Specialist
    colin_wardle@hotmail.com

    Profile photo of trajik

    No problem Andrew, just draw up an agreement with your wife to lend her 50% of the loan from her, so that way you practically have the complete loan. Your wife has an interest expense to the bank but and equal amount of interest income from you. The ATO have accepted that a husband and wife may enter into a joint loan agreement even though only one party has the investment income.

    tax@guardianaccounting.com
    http://www.guardianaccounting.com

    Profile photo of Terryw
    Originally posted by trajik:

    No problem Andrew, just draw up an agreement with your wife to lend her 50% of the loan from her, so that way you practically have the complete loan. Your wife has an interest expense to the bank but and equal amount of interest income from you. The ATO have accepted that a husband and wife may enter into a joint loan agreement even though only one party has the investment income.

    tax@guardianaccounting.com
    http://www.guardianaccounting.com

    trajik

    Just to clarify, you would be only referring to tax savings in claiming interest here? This would not help with Capital Gains Tax, asset protection or estate planning issues would it? (I am not an accountant). Thanks

    Terryw
    Discover Home Loans
    Parramatta
    Terry@discoverhomeloans.com.au
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    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of trajik

    Terry,

    the fact that the loan is in two names doesn’t impact on the CGT, Asset protection, or Estate planning as the property is still owned by the trust,

    tax@guardianaccounting.com
    http://www.guardianaccounting.com

    Profile photo of Terryw

    Tajik,

    Sorry, I misunderstood the post. I agree its the ownership that’s important for these issues.

    Terryw
    Discover Home Loans
    Parramatta
    Terry@discoverhomeloans.com.au
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    Just send me a blank email, with “subscribe” in subject line.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of redwing

    I dont undestand how what you’ve said gets the property into the HDT Trajic??

    “Money is a currency, like electricity and it requires momentum to make it Effective”

    Online Positive Cashflow and Renovating Calculators

    Profile photo of trajik

    redwing,

    I’m assuming that the contract is in the trust name, otherwise, yes it is too late unless the contract can be changed before settlement.

    The loan situation is a seperate issue to ownership of the property.

    tax@guardianaccounting.com
    http://www.guardianaccounting.com

    Profile photo of cata

    My understanding was that the IP is already purchased or at least contract signed.

    CATA
    Asset Protection Specialist
    colin_wardle@hotmail.com

    Profile photo of avantilaw

    as a lawyer we often change the name of the purchaser even after contract is signed.

    you need to novate the contract (i.e terminate the original and then sign a new one). can be done with agreement of seller

    avanti lawyersjavascript:insertsmilie(‘[suave2]’)
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    Profile photo of avantilaw

    as a lawyer we often change the name of the purchaser even after contract is signed.

    you need to novate the contract (i.e terminate the original and then sign a new one). can be done with agreement of seller

    avanti lawyers

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