Is there any Trust which fits this situation

My situation :

Current situation

2 property

A & B

I am living in A property which has a loan of 135K

i have used the equity on Property A to buy property B

B has a loan of 412K

Now i want to move in Property B and make Property A my investment property

Can i sell the property in a Trust and use all the money from the sale to offset B property (that way i live in B and don't pay any mortgage on it)

If I sell A in Trust, do i get tax benefit.

Can i take Loan for Property A on my Personal name.

if no, who can get a loan to buy the property (eg Company - if yes -> do i have to form a company)

if yes, Can I claim tax on the interest I pay on Property A Loan on my personal tax return

if no, then what happens to the interest money i pay

Will i be able to get negative gearing on the Property A (Stampduty / Rates / Land Tax / Agent Fee / Maintaince / accounting fee (basically all the expense))

If no, then what happens to the negative amount, does it get absorbed in the next year.

If i make profit on the Property A, do i get them (All expense - Rent)

Is there any Trust which fits this situation ?

How difficult is all this ? Is this legal and right, will ATO knock on my door

How much does it cost to set up a trust ?

How much does it cost for Accounting and filling of tax return for a Trust ?

I hope i have not confused anyone ?

One too many detail qs, but little light on information

Im not a bean counter, but a unit trust would be a useful vehicle probably.

As to costs etc, it would be wise to seek the advice of someone that deals with that stuff every day.

I think you are confused by trusts.

To make it easier just think of a trust as a separate person - they are treated like this for tax purposes. Call the trust X, eg.

X buys your property A. It is not logical that you could claim a deduction for something owned by X. X has to claim his own expenses. If X has a loss then X can't give this loss to you or anyone else.


Now to complicate things, lets forget the above.

Now, say you set up a unit trust. The unit trust is Z. Z buys your house. You can buy units in Z (like shares). If you borrow to buy units that will give you can income you can generally claim the interest. Its like borrowing to buy shares.

Z has only just purchased the property and rents it out. Z gets rent and takes off the deductions such as rates, insurances etc. Because Z doesn't have any interest Z should be making a profit. This profit should be distributed to the unit holders in proportion to their ownership. So you will get $Q from Z and because your interest on the loan relates to this you can deduct it. Net effect may be a loss and you may use this to offset your wage income and to save tax.

But, you have to be careful about the ATO as they may say that you did this with the sole purpose of saving tax and may disallow the interest claim.

Hope I haven't confused you more!