Using equity from HDT property for personal investment use.

Hi,
We have two Investment properties in Victoria.

IP1 purchased under our joint(wife/myself) names.
Later on, we drew some of the equity from IP1 to purchase IP2. This was purchased under HDT with myself and my wife as trustees.
I'm currently renting so no PPOR. I'm in the process of using the equity from IP1 to consolidate personal debt into a seperate loan, which would be non tax deductible.

There is enough equity from IP2 to use as a deposit for IP3 and possibly IP4. I'm looking outside Victoria as I don't want to pay more Land tax in Victoria.
An opportunity has presented itself in NSW, however due to its Land tax regulations, it is not viable to purchase IP3 under the HDT, but under personal names.

So I'm looking for a way to access the equity from IP2 to purchase IP3/IP4 under our joint names.
My thoughts are:
HDT would have a seperate equity loan on IP2 and lend this to myself/wife(not as trustees).
Myself/wife would pay the interest back to HDT, which would then pay the bank.
Having this deposit, we would then get a seperate loan to purchase IP3 under our joint names.
As both loans(HDT Deposit loan and IP3 loan) are being used for investment purposes, this would be tax deductible.

I've asked my accountant, but they were not sure and referred me to a mortgage broker/bank. I would have thought this is more an Accounting/tax question first.

Looking to get some feedback if other people have faced a similar issue.
Also if there are any recommendations for a suitable tax accountant to review, happy to engage them directly.

Thanks.

 

two aspects to consider
a) legal
if the trust allowed to let a beneficiary borrow against it, or alternatively, will the trustee be able to borrow and onlend to the beneficiary, or will a beneficary be allowed to use a trust property as security for a loan?

b) lending
Will a lender allow a person to borrow against someone else's property, and/or
Will a lender allow a trustee to borrow and onlend to a beneficiary (difficult).
Will a lender allow a cross collateralise loan (possibly)

Who is the borrower now?
Who is the trustee?

I don't really see any tax issues on the face of it.

 

You might need a new accountant.

I'm not one, but it should be as simple as the trust borrowing and getting cash out, lending to you personally (as long as the trust deed allows it) and you using the money for whatever you see fit.

Banks shouldn't have an issue with this as long as the same people are behind the whole structure - if there's other non-related directors for eg, it might get a little more complex.

You can do up a loan agreement to formalise things and keep it all above board.