I have a 1995 XJ with Cragar soft 8 wheels and metric tyres equivalent to 31". I have 3.5" of lift with 2" dropped bump stops and it appears that the tyres are rubbing on the flare mounting bolts (stock flares - the thread protruding on inner side of the guard).
Will trimming the threads down suffice, or do I need to change to aftermarket flares?
Shouldn't really rub with those tires on 3.5" lift and bumpstopped that much.. size is closer to 30 x 9.5 than a 31" high tire. Are they new, or regrooved budget tires (regrooved are usually much larger in diameter than advertised)?
Try trimming the mounting stud threads first. If that doesn't help then trim the sheetmetal, and move the flares higher up if the traffic laws there in Australia require them.