Company Invests Funds in Individuals Name

All good.

Make sure you discuss with your accountant as well the proposed changes to Division 7a as part of your cashflow planning strategy.

the loans will become 10 year loans with a higher rate of interest so important to factor that into the calculations.

 

Thanks @Mike A

 

I guess the saying should be 'you can't eat cake and not get fat too'.

You can always access money in a bucket company - assuming a separate trust as shareholder. But there might be top up tax to pay.

The problem with the trust reinvesting its income is twofold
a) trusts don't retain income (without tax at top rate) so this creates a UPE/Div7A issue in itself, plus
b) the trust would need to pay the loan back to the Company.

A double whammy.

 

That's a much better saying. You cant eat your cake and not get Fat too.

Sorry when I say the trust re invests its income I meant after its been distributed.

So yeah it looks like I will have to look at a strategy to ensure that the loan does not get to a stage that at the end of the loan term it will be impossible to pay it back without liquidating a large portion of my investments. Lucky I love a good challenge.

 

After income has been distributed it belongs to someone else.!

 

True. Until the beneficiaries give / loan it to the trust to continue investing.
@Terry_w you are such a lawyer. You take every comment and pull it apart to ensure it is 100% factual and accurate. You don't like seeing short cuts in peoples descriptions and explanations. Most people skip over the finer details and just lay out the key points in there story.

I do mean that in a good way. You leave no room for error or people to misinterpret what you say.

 

People get into trouble because of imprecise language!