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Hi
You would have to sell the property to your trust. It is probably confusing if you think of it as transfering to your trust. To make it easier, just think of it as selling to another person instead.
You sell you house to X (trust). Since it is a sale, the proceeds can be used as you please - it shouldn't matter if you pay the existing loan down beforehand or not as the loan will be discharged. And since X is borrowing to buy an investment, the interest on the full loan should be deductible.
Some things to consider:
Since this is your PPOR, and tax free, try to transfer it at a high price. There will be no CGT on your home, so you will not pay anymore tax, but the stamp duty will be incurred at the transfer price (or market value). Paying a few thousand extra in stamp duty, may save you much more in CGT later on. Then later if your trust were to ever sell the price, it would pay less CGT. You may have to justify your value, so maybe get a few valuations, and go with the highest.
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