Hi All,
I have set up a Hybrid Trust to buy a property. we are wanting to get the loan in name of highest income earner and then buy units in the Trust and the Trust buys the property. We put the scenario to our broker who then put it to ANZ and they said that it would need to be borrowed in the name of both myself and partner as we are both trustees (really directors of the trustee company). Does this sound correct?
Thanks
Matt
H Matt
Hate to say your Broker does not sound like he has any idea of how a Hybrid Trust structure works.
Richard Taylor | Australia's leading private lender
H Matt
Hate to say your Broker does not sound like he has any idea of how a Hybrid Trust structure works.
Richard Taylor | Australia's leading private lender
ANZ have previously done hybrids, Loan in a different name to the title holder, but they may have changed their policy recently.
St George seem to have no problem with it.
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
Thanks Terry and Richard I will look into it.
Terry, How long ago did you use ANZ for this purpose?
And Richard have you used AnZ to do Hybrids?
Matt
Terry and Richard,
Just talked to my Broker and he talked to ANZ again and was told that the info that he was given previously was incorrect! (my first post concern) and was told that it can be set up as initially intended – I just need to be a guarantor as I am a beneficiary of the trust.
I am glad that this has worked out as My Father is my broker and didnt want to have to go elsewhere!! so a good lesson for both of us.
Thanks
MattYes i have done a load of Anz Hybrid deals but i also agree with Terry SGB have no problem in doing them.
Richard Taylor | Australia's leading private lender
The trouble with ANZ is that you get different answers from different assessors (who don't know their own policies)!
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
I use Westpac at the moment, and they do it, but they seem to have the same issue as ANZ with people not knowing their jobs. If you find a good bank with a good contact hold on to em! I am yet to find that but I have head good reports about StGeorge.
I wont go into it but I do not recommend Westpac as their service has dropped of considerable. I will admit my investing structure is complex, but it is a worry when the one of the big four consistently screw up my loan applications causing me untold pain ans stress.
If anyone can recommend good institutions to deal with that care I am all ears!
Hi,
We are in the middle of setting things up and have just seen a very good accountant. The accountant has advise that Hybrid Trusts are being frowned upon by the ATO. They are still an option but he has strongly suggested we go for a family/Discretionary trusts.
Cheers
BenMatt,
I was obtaining refinance through ANZ with a hybrid trust and the only adjustment I had to make was to change out my wife as director of the trustee company to myself. I as director of the trustee company would then guarantee the loan with the property as security. I did not proceed however as I found some personal rulings on the ATO website disallowing intertest deductions which in my case would have been prohibitive as one of the objectives of the refinance was to transfer non-dedctible debt to deductible debt.
The deal in question was a transfer of a previous PPR to IP so I opted for a unit trust which gave me full deductability. Whilst this does not give me the same level of asset protection as a discretionary trust a discretinoary trust would not allow me to offset the loss against my personal income which was a must have for me.
Ben
Agreed IMHO a Discretionary Family Trust is certainly the safer route to follow.
If the property return is that poor should you really be buying it in the first place.
Many safer better performing assets to be looking at .
Richard Taylor | Australia's leading private lender
There shouldn't really be a problem with a HDT if the deed is worded correctly. It will need to make all of the income and CG (or a portion of it at least) go to the unit holder. After a few years the unit holder could sell the units back to the trust (and have to pay CGT) and then the trust will revert to a discretionary.
The main advantages of a HDT are:
1) the refinancing princple (trust borrows to buy the units back which increases tax deductions and releases money to pay personal debt)
2) the ability to transfer the property to your SMSF without incurring stamp duty later on.Both of these options are not available for DTs.
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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