alexlee
10-07-2007, 07:07 AM
http://ato.gov.au/individuals/content.asp?doc=/content/45127.htm&pc=001/002/002/011/006&mnu=17591&mfp=001/002&st=&cy=0
http://law.ato.gov.au/atolaw/view.htm?docid=TXR/TR9822/NAT/ATO/00001
With reference to Harts case and TR 98/22, say I have a split loan, initially $500k for my PPOR, split 200/300. At the start everything is non-deductible. Both IO. I also have an offset that I put extra money into.
Now, after 5 years, say, I have $200k in the offset. I move the money from the offset into the 200k split part, then redraw it to buy shares. So I still have a 200/300 split but now it's 200 deductible, 300 non-deductible.
If I continue to use the offset and pay interest only on the loan, am I entitled to full interest deductions on the 200k in light of TR 98/22? My thinking is that since the loans are NOT P&I and I'm not capitalising interest on the deductible loan that TR 98/22 doesn't apply.
After this, if I were to make any further principle payments to the loan, would I have to apply such payments equally (or proportionately) between deductible and non-deductible? e.g. in the case of the 200 deductible / 300 non, if in the future I have another 100k in the offset, would I only be allowed to put a max of $50k against the non-deductible split loan?
Alex
http://law.ato.gov.au/atolaw/view.htm?docid=TXR/TR9822/NAT/ATO/00001
With reference to Harts case and TR 98/22, say I have a split loan, initially $500k for my PPOR, split 200/300. At the start everything is non-deductible. Both IO. I also have an offset that I put extra money into.
Now, after 5 years, say, I have $200k in the offset. I move the money from the offset into the 200k split part, then redraw it to buy shares. So I still have a 200/300 split but now it's 200 deductible, 300 non-deductible.
If I continue to use the offset and pay interest only on the loan, am I entitled to full interest deductions on the 200k in light of TR 98/22? My thinking is that since the loans are NOT P&I and I'm not capitalising interest on the deductible loan that TR 98/22 doesn't apply.
After this, if I were to make any further principle payments to the loan, would I have to apply such payments equally (or proportionately) between deductible and non-deductible? e.g. in the case of the 200 deductible / 300 non, if in the future I have another 100k in the offset, would I only be allowed to put a max of $50k against the non-deductible split loan?
Alex