The Structuring Podcast: Recent Episodes
Terryw
A podcast about the legal, taxation and lending aspects of structuring - how you own assets, how those assets are funded and the transactions associated with this. Your host, Terry Waugh, aka Terryw, is a solicitor, Chartered Tax Adviser, mortgage broker and former financial planner. Terry runs a law firm and a mortgage broking company. www.structuring.com.au
Fan Mail - Send us a Text Message
Terry Waugh is a solicitor, mortgage broker and tax adviser.
Today’s topic is interest only loans.
—
If you would like to ask a question which could be answered by Terry on the podcast please go to the podcast page and follow the instructions.
Support the show
www.structuring.com.au
Fan Mail - Send us a Text Message
Terry Waugh is a solicitor, mortgage broker and tax adviser.
Today’s topic is claiming interest when building a granny flat.
—
If you would like to ask a question which could be answered by Terry on the podcast please go to the podcast page and follow the instructions.
Support the show
www.structuring.com.au
Fan Mail - Send us a Text Message
Terry Waugh is a solicitor, mortgage broker and tax adviser.
Today’s topic is foreign persons and discretionary trusts, especially in relation to NSW law.
—
If you would like to ask a question which could be answered by Terry on the podcast please go to the podcast page and follow the instructions.
Support the show
www.structuring.com.au
Fan Mail - Send us a Text Message
Terry Waugh is a solicitor, mortgage broker and tax adviser.
In this episode I'm talking about naming beneficiaries in discretionary trusts.
—
If you would like to ask a question which could be answered by Terry on the podcast please go to the podcast page and follow the instructions.
Support the show
www.structuring.com.au
Fan Mail - Send us a Text Message
Terry Waugh is a solicitor, mortgage broker and tax adviser.
Today’s topic is about debt recycling and the need for splitting loans.
—
If you would like to ask a question which could be answered by Terry on the podcast please go to the podcast page and follow the instructions.
Support the show
www.structuring.com.au
Fan Mail - Send us a Text Message
Terry Waugh is a solicitor, mortgage broker and tax adviser.
Today’s topic is about debt recycling and discretionary trusts, particularly when the invested assets are generating a loss.
—
If you would like to ask a question which could be answered by Terry on the podcast please go to the podcast page and follow the instructions.
Support the show
www.structuring.com.au
Fan Mail - Send us a Text Message
Terry Waugh is a solicitor, mortgage broker and tax adviser.
Today’s topic is about taxation of children’s income.
—
If you would like to ask a question which could be answered by Terry on the podcast please go to the podcast page and follow the instructions.
Support the show
www.structuring.com.au
Fan Mail - Send us a Text Message
Terry Waugh is a solicitor, mortgage broker and tax adviser.
Today’s topic is about trusts buying both shares and property.
—
If you would like to ask a question which could be answered by Terry on the podcast please go to the podcast page and follow the instructions.
Support the show
www.structuring.com.au
Fan Mail - Send us a Text Message
Terry Waugh is a solicitor, mortgage broker and tax adviser.
Today’s topic is redrawing from loans.
—
If you would like to ask a question which could be answered by Terry on the podcast please go to the podcast page and follow the instructions.
Support the show
www.structuring.com.au
Fan Mail - Send us a Text Message
Terry Waugh is a solicitor, mortgage broker and tax adviser.
Today I’m talking about making the most of the main residence exemption for capital gains tax.
—
If you would like to ask a question which could be answered by Terry on the podcast please go to the podcast page and follow the instructions.
Support the show
www.structuring.com.au
Fan Mail - Send us a Text Message
Terry Waugh is a solicitor, mortgage broker and tax adviser.
Today I’m talking about debt recycling and which loan to debt recycle first.
--
If you would like to ask a question which could be answered by Terry on the podcast please go to the podcast page and follow the instructions.
Support the show
www.structuring.com.au
Fan Mail - Send us a Text Message
Terry Waugh is a solicitor, mortgage broker and tax adviser.
Today’s topic is all about the clawback laws and asset protection.
—
If you would like to ask a question which could be answered by Terry on the podcast please go to the podcast page and follow the instructions.
Support the show
www.structuring.com.au
Fan Mail - Send us a Text Message
Terry Waugh is a solicitor, mortgage broker and tax adviser.
Today’s topic is all about joint tenancy and estate planning.
--
If you would like to ask a question which could be answered by Terry on the podcast please go to the podcast page and follow the instructions.
Support the show
www.structuring.com.au
Fan Mail - Send us a Text Message
Terry Waugh is a solicitor, mortgage broker and tax adviser.
Today I’m talking about the 6 year rule and the cost base reset for property.
--
If you would like to ask a question which could be answered by Terry on the podcast please go to the podcast page and follow the instructions.
Support the show
www.structuring.com.au
Fan Mail - Send us a Text Message
Terry Waugh is a solicitor, mortgage broker and tax adviser.
Today’s topic is all about testamentary trusts and the tax savings.
--
If you would like to ask a question which could be answered by Terry on the podcast please go to the podcast page and follow the instructions.
Support the show
www.structuring.com.au
Fan Mail - Send us a Text Message
Terry Waugh is a solicitor, mortgage broker and tax adviser.
Today I’m talking about the 6 year rule and the cost base reset for property.
--
If you would like to ask a question which could be answered by Terry on the podcast please go to the podcast page and follow the instructions.
Support the show
www.structuring.com.au
Fan Mail - Send us a Text Message
Terry Waugh is a solicitor, mortgage broker and tax adviser.
Today’s topic is all about using the 6 year rule when you buy another main residence.
--
If you would like to ask a question which could be answered by Terry on the podcast please go to the podcast page and follow the instructions.
Support the show
www.structuring.com.au
Fan Mail - Send us a Text Message
Terry Waugh is a solicitor, mortgage broker and tax adviser.
Today’s topic is about super funds borrowing with others to acquire property.
--
If you would like to ask a question which could be answered by Terry on the podcast please go to the podcast page and follow the instructions.
Support the show
www.structuring.com.au
Fan Mail - Send us a Text Message
Terry Waugh is a solicitor, mortgage broker and tax adviser.
Today’s topic is who can advise on what.
--
If you would like to ask a question which could be answered by Terry on the podcast please go to the podcast page and follow the instructions.
Support the show
www.structuring.com.au
Fan Mail - Send us a Text Message
Terry Waugh is a solicitor, mortgage broker and tax adviser.
Today’s topic is general rules with structuring.
--
If you would like to ask a question which could be answered by Terry on the podcast please go to the podcast page and follow the instructions.
Support the show
www.structuring.com.au
Fan Mail - Send us a Text Message
Terry Waugh is a solicitor, mortgage broker and tax adviser.
Today I’m talking about borrowing from a private company.
--
If you would like to ask a question which could be answered by Terry on the podcast please go to the podcast page and follow the instructions.
Support the show
www.structuring.com.au
Fan Mail - Send us a Text Message
Terry Waugh is a solicitor, mortgage broker and tax adviser.
Today's topic is all about the 6 year rule when you’re absent for more than 6 Years.
Property Chat Forum
Tax Tip 109: CGT and Being absent from the main residence for more than 6 years
https://www.propertychat.com.au/community/threads/tax-tip-109-cgt-and-being-absent-from-the-main-residence-for-more-than-6-years.9885/
--
If you would like to ask a question which could be answered by Terry on the podcast please go to the podcast page and follow the instructions.
Support the show
www.structuring.com.au
Fan Mail - Send us a Text Message
Terry Waugh is a solicitor, mortgage broker and tax adviser.
Today's topic is all about whether you should pay off investment debt or not.
--
If you would like to ask a question which could be answered by Terry on the podcast please go to the podcast page and follow the instructions.
Support the show
www.structuring.com.au
Fan Mail - Send us a Text Message
Terry Waugh is a solicitor, mortgage broker and tax adviser.
Today's topic is all about the deductibility of interest when borrowing to acquire vacant land.
--
If you would like to ask a question which could be answered by Terry on the podcast please go to the podcast page and follow the instructions.
Support the show
www.structuring.com.au
Fan Mail - Send us a Text Message
Terry Waugh is a solicitor, mortgage broker and tax adviser.
Today's episode is a quick tip about ways to shift income for people who have money in offset accounts that are linked to debts on which the interest is deductible.
--
If you would like to ask a question which could be answered by Terry on the podcast please go to the podcast page and follow the instructions.
Support the show
www.structuring.com.au
Fan Mail - Send us a Text Message
Terry Waugh is a solicitor, mortgage broker and tax adviser.
Today's topic is all about the interaction of testamentary trusts with trusts setup during lifetime discretionary trusts.
--
If you would like to ask a question which could be answered by Terry on the podcast please go to the podcast page and follow the instructions.
Support the show
www.structuring.com.au
Fan Mail - Send us a Text Message
Terry Waugh is a solicitor, mortgage broker and tax adviser.
Today's topic is right of occupancy trusts in wills.
--
If you would like to ask a question which could be answered by Terry on the podcast please go to the podcast page and follow the instructions.
Support the show
www.structuring.com.au
Fan Mail - Send us a Text Message
Terry Waugh is a solicitor, mortgage broker and tax adviser.
Today I’m talking about some basic tax differences between discretionary trusts and companies.
--
If you would like to ask a question which could be answered by Terry on the podcast please go to the podcast page and follow the instructions.
Support the show
www.structuring.com.au
Fan Mail - Send us a Text Message
Terry Waugh is a solicitor, mortgage broker and tax adviser.
Today I’m talking about new trusts and or companies borrowing money.
--
If you would like to ask a question which could be answered by Terry on the podcast please go to the podcast page and follow the instructions.
Support the show
www.structuring.com.au
Fan Mail - Send us a Text Message
Terry Waugh is a solicitor, mortgage broker and tax adviser.
Today I’m talking about some legal issues with related party loans.
--
If you would like to ask a question which could be answered by Terry on the podcast please go to the podcast page and follow the instructions.
www.structuring.com.au
Fan Mail - Send us a Text Message
Terry Waugh is a solicitor, mortgage broker and tax adviser.
Today’s topic is all about trusts and foreign persons.
--
If you would like to ask a question which could be answered by Terry on the podcast please go to the podcast page and follow the instructions.
www.structuring.com.au
Fan Mail - Send us a Text Message
Today’s episode is about borrowing and on-lending money.
www.structuring.com.au
Fan Mail - Send us a Text Message
Today we will talk further about trustees of trusts and more specifically about whether the same trustee can be used more than once.
www.structuring.com.au
Fan Mail - Send us a Text Message
Today’s topic is all about trustees of a discretionary trust.
www.structuring.com.au
Fan Mail - Send us a Text Message
Today’s topic is negative gearing and debt recycling.
www.structuring.com.au
Fan Mail - Send us a Text Message
Today’s topic is using the 6 year CGT rule on an investment property.
www.structuring.com.au
Fan Mail - Send us a Text Message
Today’s topic is about debt recycling and specifically about the need to completely pay down a loan.
www.structuring.com.au
Fan Mail - Send us a Text Message
Today’s topic is claiming interest on the main residence after you have moved out.
www.structuring.com.au
Send us a Text Message.
Today I’m talking about gifting or lending money to a new discretionary trust.
www.structuring.com.au
Send us a Text Message.
Today's topic is about changing trustees of a discretionary trust.
www.structuring.com.au
Today I’m talking about the main residence exemption for capital gains tax when building on vacant land.
www.structuring.com.au
Today’s topic is who should be the trustee of a discretionary trust.
www.structuring.com.au
Today’s topic is self managed super funds (SMSF) borrowing to buy property.
www.structuring.com.au
Today I’m answering a listener question from Steve about trusts for minors in a will.
If you would like to ask a question which could be answered by Terry on the podcast please go to the podcast page and follow the instructions.
www.structuring.com.au
Today’s topic is about joint ownership and who claims what on tax.
www.structuring.com.au
Today I’m continuing to cover some things that you should consider when preparing the deed for a discretionary trust.
www.structuring.com.au
Today I’m going to briefly cover some things that you should consider when preparing the deed for a discretionary trust.
www.structuring.com.au
Today I'm talking about the structuring of a discretionary trust.
www.structuring.com.au
Today’s topic is discretionary trusts. This is a difficult concept to grasp but my pizza analogy might help.
www.structuring.com.au
Today I’m talking about superannuation death benefits paid into a deceased estate.
www.structuring.com.au
Today’s episode is about trusts and negative gearing.
PropertyChat Forum - Tax Tip 325: Trusts Can Negative Gear
PropertyChat Forum - Tax Tip 225: SMSFs and Negative Gearing
www.structuring.com.au
Today’s topic is about wills and specifically why you might need one.
PropertyChat Forum - Legal Tip 66: Why should I have a will?
www.structuring.com.au
Today we have a listener question from Nick who is asking about debt recycling with trusts.
PropertyChat Forum - Incorporating a Trust into a Strategy Recycling Debt
PropertyChat Forum - Tax Tip 511: Incorporating a Trust into a Strategy of Debt Recycling when Interest Rates are High
www.structuring.com.au
Today’s topic is getting existing properties into a discretionary trust.
www.structuring.com.au
Today we’re talking about two people subdividing land and ending up with one block each.
www.structuring.com.au
Today’s topic is about whether to have a corporate trustee for your discretionary trust or an individual trustee.
www.structuring.com.au
Today’s topic is holding shares for your children as trustee for them.
www.structuring.com.au
Today’s topic is unit trusts and the 2 methods of borrowing.
PropertyChat Forum - Unit Trusts and the 2 Methods of Borrowing
www.structuring.com.au
Today’s episode is about debt recycling and bucket companies.
PropertyChat Forum - Tax Tip 500: Debt Recycling and Bucket Companies
www.structuring.com.au
Today’s topic is how to pay interest only on a principal and interest loan.
PropertyChat Forum - Tax Tip 46: Want to Pay IO on a PI loan?
www.structuring.com.au
Today’s episode is about the payment of super death benefits to the deceased estate.
www.structuring.com.au
Today I’m talking about deductions for travel in relation to investment properties.
Here is a list of my tips in relation to claiming travel expenses on the PropertyChat Forum.
Tax Tip 211: Deductions for Travel Expenses Related to Property
Tax Tip 224: Can you claim Travel Relating to Property off CGT?
Tax Tip 370: Deductions for Travel related to Investment property
Tax Tip 417: Travel in Relation to Residential Property could be Deductible
www.structuring.com.au
Today I’m talking about the tax implications of parking money in loans.
PropertyChat Forum - Tax Tip 14: Never ‘Park’ money in a loan
www.structuring.com.au
Today’s episode is about transfers of property between spouses.
PropertyChat Forum - Tax Tip 68: Transfers Between Spouses and Stamp Duty in NSW
www.structuring.com.au
Today I'm talking about debt recycling when interest rates are high.
www.structuring.com.au
Todays topic is trusts borrowing money. A trust is not a legal entity and therefore can not borrow money.
www.structuring.com.au
Todays topic is debt recycling when you want to invest in small amounts.
www.structuring.com.au
Today’s topic is about when person X pays the interest and expenses on a property owned by person Y. In this situation, who can claim the expenses?
www.structuring.com.au
Today’s topic is the gifting of property at under market value to family and friends and an alternative strategy.
www.structuring.com.au
In this episode I’m talking about the death of a appointer. I’m specifically talking about appointors of discretionary trusts.
www.structuring.com.au
Today’s topic is separations and loans in the context of divorces or defect relationships breaking down.
www.structuring.com.au
In this episode I’m talking about the different ways in which profit on the sale of a property can be taxed.
PropertyChat Forum - Tax Tip 143: The sale of a property – Capital or Revenue account?
www.structuring.com.au
In this episode I’m talking about some situations where the main residence may be taxed.
PropertyChat Forum - Tax Tip 165: Not all Main Residences are Exempt from CGT
www.structuring.com.au
In this episode I’m talking about tax traps relating to property ownership and the deductibility of interest.
www.structuring.com.au
In this episode I’m talking about a little tax trap for jointly owned property which is owned as joint tenants as opposed to tenants in common.
www.structuring.com.au
Today’s episode is part 2 of my ideal way to structure a loan to purchase an investment property.
PropertyChat Forum - Terryw’s Ideal Loan Structure
www.structuring.com.au
Today’s episode is part 1 of my ideal way to structure a loan to purchase an investment property.
PropertyChat Forum - Terryw’s Ideal Loan Structure
www.structuring.com.au
Today I’m talking about the tax advantages of a super proceeds trust set up inside a will.
www.structuring.com.au
Today I’m talking about the tax implications of buying a holiday home in a company and allowing someone to stay in that property without paying rent.
www.structuring.com.au
Today’s topic is borrowing and on-lending the borrowed money and deductibility of interest.
www.structuring.com.au
Today I’m discussing the tax implications of both redraw and offset accounts on your loans.
www.structuring.com.au
In this episode I’m talking about powers of attorney and estate planning.
www.structuring.com.au
Today’s topic is the AMP Master Limit Facility and how it can be used for debt recycling.
www.structuring.com.au
Today I’m talking about related party loans. These are loans where the lender and the borrower are somehow related.
www.structuring.com.au
Today’s topic is security for loans. There are 2 types of loans - secured loans and unsecured loans.
www.structuring.com.au
Today I’m speaking about the distinction between borrowing to invest and debt recycling.
Property Chat Forum - Tax Tip 219: Debt Recycling v Borrowing Extra to Invest
www.structuring.com.au
Today’s topic is about binding death benefit nominations in superannuation.
www.structuring.com.au
Today’s topic is about helping parents so they don’t have to sell their main residence as they age.
Property Chat Forum - Legal Tip 407: Informal ‘Reverse Mortgages’ from Adult Children and Estate Planning
www.structuring.com.au
Today we’re talking about wills and specifically what happens if a person you leave a gift to dies before or after you.
www.structuring.com.au
Today I'm talking about the different ways you can be taxed on the profit made when selling a property.
Links to Terry’s Tax Tips on the Property Chat forum:
- Tax Tip 143: The sale of a property – Capital or Revenue account?
- Tax Tip 157: Difference on being taxed Capital v Revenue Account
- Tax Tip 334: The Main Residence Exemption Doesn’t Apply to Property held on Revenue Account
www.structuring.com.au
Today we're talking about how to manage credit cards when paying for expenses relating to your investments.
www.structuring.com.au
This week we have the 2nd part of the Aussie Firebug episode.
In this episode we cover the following:
- Receiving the monetary value of a trust distribution that doesn’t go directly to you.
- Can you distribute franking credits only to someone in a high tax bracket?
- Working as a contractor under the PSI rule and trust distributions.
- Estate planning for families with international assets.
www.structuring.com.au/podcast
This week we have part 1 of an Aussie Firebug podcast episode that was originally published in early 2022. This is a lengthy case study involving a couple who partially owns two businesses through a company and a trust and how their current share portfolio is structured.
www.structuring.com.au/podcast
In today's episode we talk about reasons to buy a main residence before starting to invest.
www.structuring.com.au
In this episode we talk about structuring investments for your children.
www.structuring.com.au
Today we cover five things to do with your loans before quitting your job and retiring.
www.structuring.com.au
Today we’re talking about the legal implications of buying property with friends.
www.structuring.com.au
In this episode we cover how capital gains tax is worked out when you move into one of your investment properties.
www.structuring.com.au
Here are 5 more basic ways to improve serviceability or the ability to borrow more money. Very important for property investors.
www.structuring.com.au
www.structuring.com.au
Here are 5 basic ways to improve serviceability or the ability to borrow more money. Very important for property investors.
Listener Question: What is the difference between Rent and Board?
www.structuring.com.au
Here is a brief overview of some of the tax issues relating to offset accounts.
www.structuring.com.au
It is possible to redraw from a loan to invest, but there are some tax issues to consider before doing this.
Property Chat Forum - Tax Tip 6: Using Redraw to Invest
www.structuring.com.au
If you pay cash for something it is not possible to later borrow to acquire it and that means interest deductions can be lost.
www.structuring.com.au
Once an asset is sold the interest on any loan used to acquire that asset can no longer be claimed. There is, however, one limited exception to this rule and that is where an asset is sold at an amount less than the loan used to acquire it.
www.structuring.com.au
Cross collateralising loan securities can ruin retirement plans. Beware.
www.structuring.com.au
Trusts can be established by deeds, but they can also arise by circumstances. This has important consequences as it can affect asset protection, stamp duty and CGT amongst other things.
www.structuring.com.au
How you fund a trust will have a big affect on asset protection in the years to come. Trusts start with just $10 in assets usually so they need more funding before the trust can acquire assets.
www.structuring.com.au
What is cross collateralisation of Security? It is when more than one security is used as collateral for one loan - an example would be an investment property loan secured by both the investment property itself and the main residence of the borrower.
www.structuring.com.au
Do you know that deductions for travel related to property is no longer deductible for some taxpayers in some situations, but it is still deductible in some situations and is always deductible for certain taxpayers.
www.structuring.com.au
When a taxpayer dies does this trigger a CGT Event? What happens when a property passes to a beneficiary under a will?
www.structuring.com.au
What happens to 'your' discretionary trust when you die? The assets remain in the trust and cannot pass via your will so you need to plan ahead for the passing of control.
www.structuring.com.au
How can a person debt recycle when it is a trust that is going to do the investing? The interest won't be deductible to the trust, normally, as it is not the borrower - but there is a simple solution.
www.structuring.com.au
When borrowing to buy shares there are a few ways you can structure your loans, some are more tax effective than others.
www.structuring.com.au
If you borrow to buy shares the interest may be deductible if there is an expectation that the shares will produce income - dividend paying shares. Listen to find out more.
www.structuring.com.au
What happens if the trustee goes bankrupt or the appointor goes bankrupt, or the shareholders of the trustee company go bankrupt, or if a beneficiary becomes bankrupt?
www.structuring.com.au
There are 4 broad steps involved in debt recycling - listen to find out what they are.
www.structuring.com.au
Some people think CGT can be reduced by moving into an investment property before selling it. This can work in a very minor way, but won't save much tax at all usually.
www.structuring.com.au
This episode covers reimbursement agreements and trusts where arrangements are made so that person A pays the tax but person B enjoys the benefit. The ATO are focusing on this area in 2022.
www.structuring.com.au
If you have parents that are renting, it can be a good idea to help them buy a property of their own instead of yourself buying a property and renting it to them. This way the property can be CGT free, exempt from land tax, give you good asset protection and potentially great tax savings at a much later date. This episode discusses some strategies as to how you can help.
www.structuring.com.au
Companies holding property are taxed differently to individuals holding property. There are different deductions available as well as different CGT treatment. Find out more here in this episode.
www.structuring.com.au
Companies are separate legal entities and can be used to own property like a person can. There can be many advantages and disadvantages to using a company structure and in today's episode we touch on a few of these.
www.structuring.com.au
How does the claiming of interest work when the shares or property are held by the trustee of a discretionary trust? Who claims the interest? What happens if the money the trust uses to invest comes from a loan in the name of someone other than the trust?
www.structuring.com.au
In limited circumstances it is possible to retain the main residence exemption from CGT where the main residence is actually rented out. This is generally for a period of up to 6 years and is known as ‘the 6 year rule’ for CGT. Find out more in this episode.
www.structuring.com.au
When a discretionary trust is initially set up the trust will generally have assets of just $10 or so coming from the settled sum. If the trust is going to invest it must get some more money from somewhere. There are basically 2 options which are to receive gifts or to borrow money.
www.structuring.com.au
A discretionary trust is not a legal entity, but the trustee of the trust can hold property as trustee. There are a number of things to consider though as in some states a trustee holding property could result in up to $11,000 more land tax per year than an individual holding property. There are also estate planning and lending issues to consider. Legal advice is recommended.
www.structuring.com.au
The main residence is virtually the only tax free appreciating asset that a person can buy so it is important to learn about the main residence exemption so you can use it to your advantage. However now all main residences will be exempt from CGT.
www.structuring.com.au
A Company is a separate legal entity and can own property just like a person can. However there are a number of issues to consider before using a company to own property and some of these issues include the following.
- CGT and income tax is a flat rate
- Losses are trapped
- Borrowing requires directors guarantees
- Land tax
- Succession - you cannot leave the property via your will
- Stamp duty on the transfer of shares in the company
- Asset protection
www.structuring.com.au
A testamentary trust is any trust set up in a person’s will and a testamentary discretionary trust is a discretionary trust set up in a person’s will. They have all the benefits of a discretionary trust set up during a person’s lifetime, but with more. Minor children can be taxed at adult rates of tax on income derived from a deceased estate, including indirectly via a testamentary discretionary trust.
www.structuring.com.au
Land Tax is a State based revenue grab with each state having completely different laws. Generally people will be assessed for land tax based on the value of the land that they own in a particular state that is over the land tax free threshold with the principal place of residence usually excluded.
www.structuring.com.au
Lenders are always ignoring instructions and often put extra borrowed funds into the wrong account and this can cause deductions of interest to be lost if this were to happen. But there is a simple solution where this happens.
www.structuring.com.au
Some people put money into a loan in order to save interest. This is repaying the loan. When that money is redrawn it is considered new borrowings for tax purposes. Because of this you should never temporarily park money into a loan which is deductible. This is because when you redraw the money later you will potentially lose the deductions on that portion of the loan resulting in paying more tax.
The better alternative would be to park the money into an offset account attached to the investment loan so that the loan itself will not be reduced.
www.structuring.com.au
A mixed loan is a loan that has been used for more than 2 uses. An example is someone who has borrowed to buy a house paying extra off the loan and then using the redraw facility to borrow money to use as a deposit on an investment property.
Mixed loans should be avoided in situations like this as every deposit into the loan will reduce the deductible debt as well as the non-deductible debt. This will cause more tax to be payable.
It is also impossible to offset one portion of a mixed loan, so an offset account attached to a mixed loan could lead to deductible interest being reduced which leads to loss of tax savings.
If you have a mixed loan with some of the borrowed money having been used to invest, you would need to apportion the interest and working this out will become increasingly difficult the more that is paid into the loan and redrawn again. It is best to avoid in most cases.
www.structuring.com.au
What is Debt Recycling?
It is a tax strategy which involves converting non-deductible debt into deductible debt. This doesn’t involve investing in something you otherwise wouldn’t have, but shows how you can structure the way you do it to save income tax.
www.structuring.com.au
The 4 main roles in a discretionary trust are:
a) Trustee
b) Settlor
c) Appointor
d) Beneficiaries
www.structuring.com.au
Borrowing and parking the borrowed money in an offset account before it is used comes with a risk of breaking the connection between the borrowings and the investing which could mean interest on the loan is not deductible or only partially deductible going forward.
www.structuring.com.au
There are 4 major things to consider in relation to asset protection:
a) Creditors and Bankruptcy
b) Death
c) Incapacity
d) Family Law
What could happen to ‘your’ assets if any of these happened to yourself or others?
www.structuring.com.au
Before purchasing any major asset there is a checklist of things to consider and this includes, but is not limited to:
a) Income Tax
b) CGT
c) GST
d) Stamp Duty
e) Payroll Tax
f) Estate Planning
g) Asset Protection
h) Finance
Both the immediate and long term future affect on all of these needs to be considered.
www.structuring.com.au
Income tax is worked out by the formula:
Tax Payable = Taxable Income x Tax Rate
With taxable income being worked out by working out the assessable income less tax deductions.
Taxable Income = Assessable Income - Deductible Expenses
So it follows that tax can be reduced by reducing your taxable income which could be done by either or both of reducing your income or increasing your deductions.
www.structuring.com.au
This episode is a brief introduction to estate planning which involves preparing assets for when you are no longer in control. This includes setting up enduring powers of attorney, wills but also working through the passing of control of companies and trusts so that they fall into the right hands.
www.structuring.com.au
Trusts are the second greatest English invention (after the sandwich). Here I give a brief explanation of what a trust is.
www.structuring.com.au
Interest can be deductible because of section 8-1 ITAA97, but it will only be deductible to the extent that it is from a loan connected to the production of assessable income.
www.structuring.com.au
Two or more joint owners of assets have to make a choice as to how they own them.
It can be either:
a) As joint tenants
b) As tenants in common
There are different estate planning consequences between the two, which many seem not to be aware of.
www.structuring.com.au
This podcast is hosted by Terry Waugh, aka Terryw, who is a solicitor, chartered tax adviser, mortgage broker and former financial planner. He runs a law firm and a mortgage broking company. www.structuring.com.au
The 3 areas of “structuring” are:
a) Ownership Structuring
b) Loan Structuring
c) Transactional Structuring
www.structuring.com.au