Large ATO debt... Can I use some Equity?
- Thread starter maadha
- Start date
Hi maadha,
$400 / $620 = 64.51%
$490 / $620 = 79.03%
Not sure where you get 90% from.
If under 80% it can be done with at least 1 lender I know of at good %'s without going to non prime lenders.
Not too hard at 80%. Tricky at 90%.
It shouldn't be too difficult to work with this, but make sure you put some strategies in place to managed tax in the future. You don't want to be in the same position next year.
It shouldn't be too difficult to work with this, but make sure you put some strategies in place to managed tax in the future. You don't want to be in the same position next year.
Hiya
Your current LVR is 65% (400/620)
Taking it up to 80% provides an equity release of $96k
So there shouldn't be any LMI here.
Cheers
Jamie
Thanks Marty. 90% is original LVR we arranged when taking on the loan.
I should have been more clear.
Cheers.
Just be wary of contaminating the loan with the additional borrowing for the tax as pointed out above, it is unlikely that the interest will be tax deductible.
Situation arose because the management company I use for work (I'm an It contractor) wound itself up and the ato has swooped in an audited all contractors involved. Basically saying I'm an employee and can't claim all the expenses I've had for the past 5 years. They've now stung me with 90k amendment including 35k in fines and interest.
They don't seem to care that I was following the advice of a company specialising in this who had their structure setup by kpmg. In fact, the ato audited several contractors over the years but the company prepared all the docs and figures and the ato never won. It seems now That we are on our own they (ATO) just want some money back and will go after the small fry to get it and I honestly feel like I'm under attack as a cheat or criminal the way I've been dealt with.
The worst thing is that I may have to sell my only property to get out of this hole because I've got 3 kids, all under 7 and another on the way. I'm a contractor so can't rely on long term income so really don't know where to turn with this.
With no super to speak of this property was for our retirement And I was just about to use equity for our next IP. Not now though after this kick in the guts.
Cheers for all your replies.
was a serious suggestion, however it appears property is in personal name... no structure in place
these arrangements are quite common - I know someone doing this, seems to be an IT thing?
sorry to hear of this.... a lot of pressure on a young family
Ausprop i meant that as a side note,no malice towards you,i found it albeit.
I've been in a worse tax hole than that- it was a very hard time, and caused some big pressures on us- personally as well as financially. I'm very fortunate that my wife is so strong- the marriage may not have survived otherwise.
The ATO does usually give options to make arrangements to pay over time- at a cost of course, but it may be an option. You may be able to pay off some of the debt by drawing equity and pay the rest over a period.
There is light at the end of the tunnel. It was a very dark time but we can now look back thankful that it's all over.
The ATO does usually give options to make arrangements to pay over time- at a cost of course, but it may be an option. You may be able to pay off some of the debt by drawing equity and pay the rest over a period.
There is light at the end of the tunnel. It was a very dark time but we can now look back thankful that it's all over.
Thanks Geoff,
My wife is a champion and has already helped my frame of mind a lot. She's only little but she is tough!
I'm glad to hear that you came out the other side. As you say, it can be very dark and that's where we're at right now so hopefully we see some light sooner rather than later.
Cheers.
Curious...What does the ATO charge as far as interest is concerned?
Would accessing equity without knowing the above,be the better option?
Anyhow good luck maadha,things will pan out.Slow and easy wins the race!
Sure it will come at a price but do you have any ability to engage with KPMG based on any documentation prepared by them that you have relied upon?
It's always a danger when contracting that you can prove that you are a bonafide contractor and not part of an elaborate scheme to avoid paying statutory entitlements & employer obligations ie payroll & PAYG tax, super, workers compensation holiday leave, sickies, RDOs, long service etc.
They will apply a control test (could you outsource your work to others? Were you doing work for other (not related) companies or was this your sole provider? (if you have other similar contracts or simultaneous contracts all the better).
It's always a danger when contracting that you can prove that you are a bonafide contractor and not part of an elaborate scheme to avoid paying statutory entitlements & employer obligations ie payroll & PAYG tax, super, workers compensation holiday leave, sickies, RDOs, long service etc.
They will apply a control test (could you outsource your work to others? Were you doing work for other (not related) companies or was this your sole provider? (if you have other similar contracts or simultaneous contracts all the better).
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