tax deductible??

[Homer J Simpson]

Would the interest charged when using the equity in a property to obtain a cashbond still be tax deductable (since the argument is that the cashbond is needed to obtain serviceability) If the extra serviceability that it gains is not used(sits there in a form of LOC) for a financial year?
Example: If a property has $400K in equity and you use $100K to purchase a Cashbond to satisfy serviceability, thus $300K lies in a LOC for a financial year.
Which begs another question, if you purchase a property using that remaining $300k in your wife's name. Is the interest on the $300K tax deductible in your name and would the argument of having the cashbond to satisfy serviceability still stand if no assets were bought in your own name?

[sbe]

Steve & Dale can probably answer better, but here goes.

Would interest be deductable - yes - the purpose is still servicability. You may have an argument though if it's not servicing anything......Workaround would be service existing investment or similar. If none, dont start it yet - I reckon you'll have a hard time argueing the case.

If you didn't buy the house in your name, you'd have a VERY hard time getting the tax man to let you claim any expenses for it. Perhaps something of a hybrid trust would suit better?

Good luck

Simon.