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Financial Information you wish you knew 5 years

Discussion in 'Financial Planning' started by jrc77, 11th Mar, 2009.

  1. jrc77

    jrc77 Well-Known Member

    Joined:
    26th May, 2008
    Posts:
    147
    All,

    Thought I would start a thread on financial information/hints that people wish they knew five years ago. Might be useful for others.

    For me, the two big things are:

    1. Tax implications of offset vs redraw on home loans
    2. Concept of using a discretionary trust to hold investments

    I guess it's better late than never - but it would have been so much easier if I knew them five years. Has anyone else got anything that they wish they knew - which I might not yet know? :)

    Regards,

    Jason
     
  2. CJ. Wentworth

    CJ. Wentworth Well-Known Member

    Joined:
    9th Mar, 2008
    Posts:
    92
    Location:
    Cairns, QLD
    Not so much that I wish I had known earlier, but one that I find mentioned but not always defined. The '6 year' rule when determining your PPoR upon sale of a property.

    My basic understanding is that there is a 6 year window where you can rent out your PPoR as if it were an IP (claiming expenses and interest for tax), and upon sale you can still claim it as PPoR and hence pay no CGT.

    My basic understanding of a strategy using this is:

    Purchase your 'PPoR', hopefully recieving benefits such as FHOG. Live in it for at least 6-12 months (depending on FHOG eligibility).

    After the 6-12 months Purchase (or Rent) another property and start treating your PPoR as an IP. As long as you move between the two every 6 years you have the option to treat one as a PPoR upon sale. Of course, after you've sold one, the other cannot be claimed as PPoR during the overlapping years.


    I'm sure someone can word that much more eloquently than I.
     
  3. Chris.R_WA

    Chris.R_WA Well-Known Member

    Joined:
    7th Aug, 2006
    Posts:
    113
    Location:
    Perth, WA
    Three little letters...



    F M G :)
     

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  4. ffc1883_1996

    ffc1883_1996 Active Member

    Joined:
    12th Sep, 2007
    Posts:
    31
    Location:
    Melbourne, VIC
    Never deal with Macquarie bank. Ever.
     
  5. Chris C

    Chris C Well-Known Member

    Joined:
    2nd Apr, 2008
    Posts:
    1,327
    Location:
    Brisbane, QLD
    I wish I knew the the rhetoric of "you never lose money in the long term (7+ years)" was just marketing spin framed on very recent history.
     
  6. nitro-nige

    nitro-nige Well-Known Member

    Joined:
    8th Mar, 2007
    Posts:
    49
    Location:
    Reservoir, Melb
    stupid question

    Stupid question but what are the tax implications of offset vs redraw on home loans?
     
  7. Simon Hampel

    Simon Hampel Co-founder Staff Member

    Joined:
    9th Jun, 2005
    Posts:
    4,619
    Location:
    Sydney, Australia
    Simply put - using redraw can (in some circumstances) affect the deductibility of the interest on the loan.

    Here's some info from the glossary: http://www.invested.com.au/71/offset-account-2489/

    This concept has been discussed plenty of times before - I'll see if I can find some relevant threads.

    http://www.invested.com.au/4/offset-account-vs-redraw-future-deductions-34444/
    http://www.invested.com.au/4/increasing-ip-loan-redraw-facility-35728/
    http://www.invested.com.au/80/offset-account-16287/index4.html