IP offset account tax implications [Archive] - Somersoft Property Investment Forums

tdh78au

19-08-2008, 12:38 AM

Hi folks,
long time reader first time poster.
I've just returned from a visit to my accountant ... and he's totally freaked me out.
This is why:
I have an investment property with an interest-only investment loan @ 80% LVR. There is an offset account attached to the IP loan. Am I able to put all my income (salary & rent) into the offset account without having any tax implications if I take it back out for personal expenses (holiday, travel, day to day bills, etc)? I paid off my PPOR loan couple of months back & hence have no bad debt (with clear uncumbered PPOR title to my name).
My accountant seems to think that I am not at liberty to use the IP loan offset account for personal expenses (please note that the offset account is actually a separate deposit account to my IP loan account).
Please help!
any links to ato site and/or rulings re: same would be really appreciated as well.

Bill.L

19-08-2008, 12:57 AM

Hi TDH,

Get an better accountant, perhaps one that knows what they are talking about.

They are clearly wrong. You are not redrawing money from a loan, it is a separate account.

Your accountant either does not know what an offset account is, or does not know tax law. Either way, Why bother paying them???

There are several accountants who regularly post here, they seem to know their stuff.

bye

poppy

19-08-2008, 07:29 AM

Have you ever deposited any funds from the loan account into the offset account? That is the only reason you could not use the offset account for personal expenses.

For example say you took a loan out against your PPOR and placed the funds in the offset account and then used those funds to buy an IP. But some of the loan funds were leftover in the offset account. Then you could not take money from the offset account for personal expenses with affecting the deductibility.

19-08-2008, 08:13 AM

tdh78au

19-08-2008, 06:33 PM

19-08-2008, 06:53 PM

hi Bill, poppy & BV
appreciate your responses.
To clarify, the offset account is purely just that ... an offset account against IP loan.
There's no transfer of funds from IP loan into offset (or vice versa for that matter).
I checked with 2 other accountants during the day today (accountants that couple of my property savvy mates goto). 1 of them agreed with my accountant & the other agreed with me.
I'm now stuck cause I don't have any 'bad debt' and earn a decent income ... which I would like to use to offset the IP loan to my benefit (& the tax office's since my loss is reduced & hence they get more tax).
I might drop an email to the ATO .... *gulp*

I wouldn't worry about talking to the ATO

This only shows that the accountants you've asked either were not interested to answer your question or did not understand the product.
Either way, I would not be using these guys for my tax return
and not because they don't tell me what I want to hear but because
they don't know how to do their job....:eek:

If you decide to contact the ATO hopefully you will get through to someone who knows what an offset account is :rolleyes:
I've heard that if you call them you often get through to graduates out of Tafe or Uni with little knowledge and no experience....:eek:

Cheers

PT_Bear

19-08-2008, 07:15 PM

I'd get a better accountant. This question has been asked and answered so many times that there's no doubt about it.

Rolf Latham

19-08-2008, 07:26 PM

sack the accountant ............

A professional that doesnt know the diff between IO offset and LOC needs education.

ta
rolf

devo76

19-08-2008, 08:08 PM

Its hard to get good help. I visited my accountant with a suggested refinance and loan setup just to check with him first. The look on his face told me i was waisting his time. I actually spent my half hour explaining the benifits of a LOC, offset a/c etc etc to him not vice versa.

I then rang the ato. " Not sure sir. Let me hand you to the person in charge"

Then he says" OOH not sure sir i will have one of our specialist ring you back"

Then they say " Not sure . maybe you should ask your accountant":mad:.

Crazy. If anyone knows a good accountant please let me know.

Boyler_Room

19-08-2008, 10:24 PM

Agree with the sentiments above. If your accountant doesn't know the difference between an Offset account and a LOC then there is a serious problem and I'd be running away very fast... and taking my money with me.

You're clearly aware of what an offset is, judging by your posts. I'd consider paying the accountant who seemed to have a clue a visit (the one who "agreed with you") and giving the others a wide berth.

Cheers
BR

Pat

20-08-2008, 12:57 AM

Hi,

Taxation Determination 1999/42 cemented the problems that Lines of Credit have with the tax deductibility of interest with a mix of investment and private use purposes. Some Accountants get a whiff of drawing money from an offset account and run to this TD and think that the interest isn't tax deductible on the amount you have taken for private purposes from the offset.

An offset account doesn't contravene this law and is essentially a savings account sitting next to your Loan.

Your initial Financing advice is correct, the Accountant needs to be told the truth.

shady

20-08-2008, 09:26 AM

I'd suggest keeping any income derived from your IP (rent) separate from your personal savings other than that, get a new accountant.

I dont for a minute think that your accountant is bad or shonky but it does take some specialist knowledge to advise on IP's, he may be very good in other areas. As your paying him for advice on investing you would probably get much better value/advice from someone that has a lot of experience with investing

Bill.L

20-08-2008, 09:45 AM

Hi,

Shady, I wouldn't even be bothered with that.

In an offset account situation, the account is separate from the loan, they have different account numbers. You also get a statement from the PM to show what the rental income is.

TDH,

It is simple, go to an accountant that knows the rules.

We use an offset account with P&I repayments for one of our IP loans. That account has a lot of money in it at present, and ALL income, from all sources is placed into it. This of course offsets the interest payable and therefore reduces the tax return.

If you put enough money into an offset, then you can turn a negative property into a positive one.

bye

20-08-2008, 09:55 AM

I'd suggest keeping any income derived from your IP (rent) separate from your personal savings

Shady

In an offset account it doesn't matter mixing income up and it's particularly so when the offset is linked to an IP as it is in this case.

There is no way in the world the ATO could argue that you are getting a tax advantage by putting the rent in the offset.

In fact the ATO is getting an advantage when you deposit your personal income into the IP offset and it can be argued that personal income /savings could work better for you if they were invested elsewhere and not left in an IP offset account.

For example the IP interest is tax deductible so depending on your tax bracket you will get 30% or more of it back.
Instead of leaving your savings in your IP offset and getting a saving of 6%
if in good times you had it invested in managed funds or shares
or gear with it to buy another IP you could get a much better return than the 6% you are saving now.

Right now though, I think leaving our money in an offset is a good option.

IMHO

Cheers

shady

20-08-2008, 10:05 AM

20-08-2008, 10:12 AM

I see where you guys are coming from but at a latter stage when/if you arrange a LOC, draw it down and stick it into the same offset account for a rainy day, you'll then run into all sorts of problems combining it with personal savings

ahhhh now this is something you should never do
Mixing IP LOC and offset money can be very painful

Cheers

Spectre

20-08-2008, 11:27 AM

we've just run across a situation where the nice girl at cba told my soon to be new client to put $245k cash into his investment line of credit to save interest 4 months ago.

I emailed his accountant, who has just freaked right out as (in his opinion) our guy has now lost that deduction entirely. Think hes even rung the bank to ask them what were they thinking and why didnt they do a variable with an offset.

Long and short of it is some accountants know, some dont.

LynnH

20-08-2008, 11:40 AM

.... and don't take investment advice from 'the nice girl at the CBA' - or anyone who is not licensed to give the relevant taxation or investment advice. :confused:

Cheers
LynnH

PT_Bear

20-08-2008, 12:02 PM

Unfortunately the bank staff most people meet in a branch or over the phone have very little clue about property investment (or property for that matter). They're usually the last people I'd take investment related advice from.

tubs

20-08-2008, 12:25 PM

.... and don't take investment advice from 'the nice girl at the CBA' - or anyone who is not licensed to give the relevant taxation or investment advice. :confused:

Cheers
LynnH

Although in this case its the mortgage brokers who arent licensed to give this advice who know what's actually going on, and the accountant, who IS licensed who doesnt have a clue...

LynnH

20-08-2008, 03:12 PM

That's not the way I read it, tubs. :confused: Perhaps Luke could clarify??

Cheers
LynnH

tubs

20-08-2008, 03:20 PM

Sorry Lynne, its just that in this case, the person who is qualified to give the advice (the accountant) is wrong, but there are plenty of people such as mortgage brokers on the board who's advice is spot on.

I'm just pointing out the irony! :)

Spectre

20-08-2008, 03:21 PM

You guys are talking about 2 different things.
case 1 is the accountant who doesnt know - the initial post - which is tubs
case 2 is mine and where LynnH's was quoting on

It goes without saying in each case you need to find people who have a clue

LynnH

20-08-2008, 03:29 PM

Aaahhh! That's where the confusion arose - I was responding to Luke's post - #17. Sorry, tubs.

Cheers
LynnH

voigtstr

20-08-2008, 04:52 PM

I see where you guys are coming from but at a latter stage when/if you arrange a LOC, draw it down and stick it into the same offset account for a rainy day, you'll then run into all sorts of problems combining it with personal savings

If you arrange a LOC, why not just leave the balance of the LOC at zero for a rainy day. I wouldnt be moving the money out of it and putting it in an offset. (for a start the LOC interest rate is probably higher than your mortgage interest rate)

shady

20-08-2008, 05:50 PM

If you arrange a LOC, why not just leave the balance of the LOC at zero for a rainy day. I wouldnt be moving the money out of it and putting it in an offset. (for a start the LOC interest rate is probably higher than your mortgage interest rate)

Its done because once the LOC has been approved doesnt mean that when you want the funds they will be available. For instance...you have a LOC off $100k approved and then 18months later when you need to draw on it, the bank decides to re-asses the situation and then reduces/cancels the LOC. 50% of the reason to have the funds available is when things get tough and thats generally when the bank will baulk at giving you any money

Rob G.

20-08-2008, 07:00 PM

shady

20-08-2008, 08:08 PM

TR 2000/2 paragraph 40

The Commissioner admits that an offset account redraw does not affet the original loan principle in his very argument that LOC redraws are not "notional offset account" amounts.

I fail to see any room for discussion here in the absence of any ruling to the contrary ???

Cheers,

Rob

What are you on about?:confused:

I fail to see any relenvance here other than the fact the words 'LOC' & 'Offset account' has been mentioned

tdh78au

20-08-2008, 09:48 PM

firstly ... thanks to everyone who has responded. It's great to see such a lively discussion within a day :-)

going back to case 1 / my original post:

Pat (post 11), thanks for highlighting the TD 1999/42. It helps to understand where some of the accountants are coming from. I reckon my current accountant is probably going off this TD as well.

Bill.L, regarding post 13, you have mentioned that you deposit all your income into the offset account. I assume you also use the same offset account for personal day-to-day expenditure?

I did a search on the ATO website and came across the following two taxation rulings: TR 98/22 & TR 93/6

TR 98/22 probably does not apply in this case .... because here the ATO is talking about split & linked accounts. Whereas in my case it's a dual account situation.

TR 93/6 does talk about dual accounts and also mentions that it's acceptable. Question (v) in the same ruling also answers the following "What happens if the interest is deductible?". However, TR 93/6 is more focused on the (non-existent) income from offset accounts & tax/FBT implications for same. Sadly it doesn't reflect on the treatment of deductible interest against the varying balance of IP loan (which would be the case when the offset is used for personal expenses).

Upon everyone's advise here, I decided to actually drop an email to ATO in writing (rather than call). It's been a day now and still no response from them. Will let you know if I hear back.

Bill.L

20-08-2008, 11:35 PM

Yes

I had to write something else because my message was too short. :)

bye

beekay

22-08-2008, 09:55 PM

Hi folks,

I just saw my accountant today and she told me the exact same thing!!! She said not to put anymore money in the offset as she reckons this will affect whether my interest can or can't be deducted.

I'm in a similar situation, I have a IO loan and an offset account where I park my wage and draw on it for daily expenses (well since I settled in June 2008).

She also gave an example of one of her clients not being able to claim interest on 3 of his properties. I'm trying to seek clarification here and if anyone has the appropriate tax laws, I'd love to show her.

Regards,

beekay.

Boyler_Room

22-08-2008, 11:04 PM

beekay,

Get a new accountant, as has been suggested to others in this thread. If we were talking about a LOC, then your accountant would be on the money, but an offset account is simply a savings account that is completely separate from your loan.

It does mean that you'll likely have a reduced tax deduction as you won't be paying as much in interest but it does NOT have an impact on your interest being deductible.

Reall,y it's a simple thing. I don't understand how someone in the industry could get something so wrong. I feel for all the property investors (negatively gearing in particular) not getting their full deductions because of poor tax advice from so-called "experts".

Cheers
BR

Bill.L

22-08-2008, 11:06 PM

Hi Boiler,

Exactly on the money.

How many times does it have to be said, if the accountant doesn't know, get one who does.

bye

beekay

22-08-2008, 11:45 PM

Boyler_Room

22-08-2008, 11:54 PM

beekay,

As I said in my previous post, an offset account is a savings account, just as any other savings account is a savings account. Would your interest NOT be deductible if you put all your income (including investment income) into your everyday savings account (which is just what an offset account is... at most banks)?

Your accountant has confused a LOC with an offset account. They are two very separate and different things. An offset account is simply a savings account. A LOC is very, very different... and is actually what your accountant is talking about.

Ask them if they know what an offset account is and how it works. That should give you enough information.

Cheers
BR

Pat

23-08-2008, 12:24 AM

thanks for your replies guys, before I ditch my current accountant and goto one that knows, I'd like some info I can show my current accountant so at least she gets the feedback that she's doing something wrong.

Is there any page on the Taxation laws page that clarifies this? I looked at the previous postings, but they don't seem to hit the nail on the head, or I could be wrong.

Hi Beekay,

As Rob has mentioned para 40 of TR 2000/2 clearly states that an offset facility doesn't effect the tax deductibility of the original loan amount.

Example $200,000 I/P Loan, you pay an extra $30,000 into an Offset account linked to this loan. 6 Months later you redraw that $30,000 from the offset facility for a trip to the Olympics to see Steve Hooker win a Gold Medal in the Pole Vault. The interest on the $200,000 will remain fully deductible.

However if you paid $30,000 off a LOC attached to an I/P and then redrew that amount 6 months later to see the flying red doormat strike Gold on the Pole Vault then the interest on that $30,000 redraw would be seen as a new private loan and the interest would not be deductible.

Hope this helps

allblack

23-08-2008, 12:50 AM

Upon everyone's advise here, I decided to actually drop an email to ATO in writing (rather than call). It's been a day now and still no response from them. Will let you know if I hear back.

My bet is you won't hear back from them for at least 28 days, if at all so don't hold your breath. Then they will just refer you to relevant legislation and not give you a straight answer.

shady

23-08-2008, 08:52 AM

As Rob has mentioned para 40 of TR 2000/2 clearly states that an offset facility doesn't effect the tax deductibility of the original loan amount.

I'm sure there is a better ruling to be referring to.

TR 2000/2 paragraph 40

The Commissioner admits that an offset account redraw does not affect the original loan principle in his very argument that LOC redraws are not "notional offset account" amounts.

This just states that the commissioner agrees that an offset account is not a LOC and that they are different animals. It also says that an offset account does not affect the original loan principle.

****EDIT
mmmm, just thinkning about those 6 words.....'does not affect the original loan principle'. Maybe it is the correct ruling

appologies Rob.

tdh78au

23-08-2008, 10:09 AM

I reckon if you put together "TR 2000/2 paragraph 40" with "TR 93/6" and "TR 98/22"; that's enough for any savvy investor (+ ATO) to deduce that IP loan + offset arrangement is legit.

Beekay, if ure serious about providing feedback to your accountant, then perhaps you run these rulings past her?

jimmijamz

24-08-2008, 04:50 PM

I have a question, and i'm not an accountant...

As Rob has mentioned para 40 of TR 2000/2 clearly states that an offset facility doesn't effect the tax deductibility of the original loan amount.
Hope this helps
This i understand.

Hi Beekay,
However if you paid $30,000 off a LOC attached to an I/P and then redrew that amount 6 months later to see the flying red doormat strike Gold on the Pole Vault then the interest on that $30,000 redraw would be seen as a new private loan and the interest would not be deductible.
Hope this helps

I'm confused. >_<.
Why do people advocate, put all ur income into the LOC or Offset. And then use the LOC to pay for all your IP's expenses and all your credit card debit? Isn't the credit card debt your personal expenses? How do you seperate the interest on what was for investment purposes and what is for private use?

LynnH

24-08-2008, 05:15 PM

jimmijamz

As Pat said, if you put it in the LOC which has been set up for investment purposes and then subsequently withdraw $ for private purposes, then interest is not deductible on the funds used for private purposes.

However, if you put it in the offset a/c, there is no effect on deductibility of the interest. As per Pat's example: if you have $200,000 IP loan and $30,000 in the offset a/c, you will only be charged interest on $170,000. If you withdraw the $30,000 from the offset a/c for private use, then interest is charged on the full balance of the IP loan, as there are no longer any funds if the offset a/c. Note that there is no mixing of private and investment funds because the balance of the IP loan has not changed - just the amount of interest that has been charged.

If you have an LOC which is for private purposes only, then it is OK to put your salary into it, put private expenses on credit card and pay the card off each month. But you should keep IP expenses and private expenses completely separate, or things get very messy - and very expensive to sort out.

I hope this helps to clarify things.

Cheers
LynnH

jimmijamz

24-08-2008, 06:27 PM

As Pat said, if you put it in the LOC which has been set up for investment purposes and then subsequently withdraw $ for private purposes, then interest is not deductible on the funds used for private purposes.

hmm.... i may have not clarified it 110% with my broker. or he omitted such a *minor* detail.. hmmm.

Why don't they tell you this *@#&$(*&#.??? I doubt it's not like they don't know the tax complications.

jimmijamz

24-08-2008, 07:10 PM

If you have an LOC which is for private purposes only, then it is OK to put your salary into it, put private expenses on credit card and pay the card off each month. But you should keep IP expenses and private expenses completely separate, or things get very messy - and very expensive to sort out.

Thanks LynnH.
So if you were to have a LOC, how would you tell/ separate the interest on what is investment & what is private use on the same LOC?

ie. Thus can you put your salary into the LOC, use that to pay the investment expenses. Any additional funds for private use which you withdraw from the LOC, how would your accountant calculate the interest on the amount withdrawn month from month?

The only way then, is that should you ever put money into the LOC, then you can never take out anything for private uses or else there will be headaches?

Pat

24-08-2008, 10:34 PM

Hi Jimmi,

You have a LOC (A) for personal withdrawals which is funded by all your income including salary, rent, interest, dividends etc. and then you have another LOC (B) for all investment property expenses which is funded by excess money in LOC (A) and drawings on the LOC (B).

So here you have your accounts seperated for easy recordings for you Accountant. Interest on LOC (A) is not deductible and Interest on LOC (B) is deductible.

Hope this helps

redwing

24-08-2008, 10:51 PM

Thanks LynnH.
So if you were to have a LOC, how would you tell/ separate the interest on what is investment & what is private use on the same LOC?

ie. Thus can you put your salary into the LOC, use that to pay the investment expenses. Any additional funds for private use which you withdraw from the LOC, how would your accountant calculate the interest on the amount withdrawn month from month?

The only way then, is that should you ever put money into the LOC, then you can never take out anything for private uses or else there will be headaches?

Have a look at this free spreadsheet from Gatherumgoss (http://www.gatherumgoss.com/free_stuff.htm) have a look at "Determining the Tax Deductible Interest payments on a single loan with dual purpose"

jimmijamz

24-08-2008, 11:33 PM

You have a LOC (A) for personal withdrawals which is funded by all your income including salary, rent, interest, dividends etc. and then you have another LOC (B) for all investment property expenses which is funded by excess money in LOC (A) and drawings on the LOC (B).

Hope this helps

Let me try to rephrase this in newbie layman's terms... It's still a bit cloudy in my mind.

So from the one property you currently own. You take out 2 LOC. (is that possible?) LOC(B) is for investment LOC(A) is for personal.

LOC(B) starts off with 100k. (ie. to pay for deposit of new IP)
LOC(A) starts off with zero balance (for private)

LOC(A) gets all income (say 5k/ mth) and pay for any private use & credit card (say 2k/ mth). Therefore you got 3k left (or -3k balance)

LOC(B) use to pay IP expense & interests (say 1k/ mth)
- Thus 100k + 1k = 101k

Now you use LOC(A) -3k balance, and put into LOC(B).
Therefore LOC(B) is now 101k - 3k = 98k

Thus LOC(A) is back at zero. Each month as your income comes in (you should have more than enough to cover outgoings). It pays off the LOC (A) and any excess is funnelled immediately to LOC (B)

jimmijamz

24-08-2008, 11:45 PM

Have a look at this free spreadsheet from Gatherumgoss (http://www.gatherumgoss.com/free_stuff.htm) have a look at "Determining the Tax Deductible Interest payments on a single loan with dual purpose"

That's an interesting spreadsheet Redwing. So basically you have to be diligent in keeping records if you start using your LOC for dual purpose.

Can you take out 2 LOC from the one property?
Or if you have one LOC now, can you take another LOC from the same property instead of increasing the LOC for the dual purpose as described.

ruroshin

25-08-2008, 08:26 AM

Let me try to rephrase this in newbie layman's terms... It's still a bit cloudy in my mind.

So from the one property you currently own. You take out 2 LOC. (is that possible?) LOC(B) is for investment LOC(A) is for personal.

LOC(B) starts off with 100k. (ie. to pay for deposit of new IP)
LOC(A) starts off with zero balance (for private)

LOC(A) gets all income (say 5k/ mth) and pay for any private use & credit card (say 2k/ mth). Therefore you got 3k left (or -3k balance)

LOC(B) use to pay IP expense & interests (say 1k/ mth)
- Thus 100k + 1k = 101k

Now you use LOC(A) -3k balance, and put into LOC(B).
Therefore LOC(B) is now 101k - 3k = 98k

Thus LOC(A) is back at zero. Each month as your income comes in (you should have more than enough to cover outgoings). It pays off the LOC (A) and any excess is funnelled immediately to LOC (B)

jimmijamz why don't you do this:

Use one property you currently own setup 1 LOC for investment purpose, use this to pay for all your IP expenses. Now Setup offset account attached to the LOC, put all your income into your offset account, pay all your private expense with your credit card, at the end of the month use balance in offset account to pay for credit card.

That way you don't touch your LOC at all unless its for IP expense and your offset account is reducing your LOC interest as well while keeping your private expenses seperate.

jimmijamz

25-08-2008, 09:21 AM

[QUOTE=ruroshin;448676]jimmijamz why don't you do this:
Use one property you currently own setup 1 LOC for investment purpose, use this to pay for all your IP expenses. Now Setup offset account attached to the LOC, put all your income into your offset account, pay all your private expense with your credit card, at the end of the month use balance in offset account to pay for credit card.
QUOTE]

I am going to ask a really stupid question...
but you can set up an offset against a LOC? O_o

LynnH

25-08-2008, 09:34 AM

I am going to ask a really stupid question...but you can set up an offset against a LOC? O_o

Not with my bank - or, at least, last time I checked we couldn't. :(

But that doesn't mean that it's not possible ..... am sure one of our knowledgeable brokers can point you in the right direction with this. Qlds007? Rolf L? Rolf S? lukentel?

Cheers
LynnH

Boyler_Room

25-08-2008, 02:04 PM

Lines of Credit don't have offset accounts attached to them as a general rule. They're a similar beast.

If you want an offset account, generally you need to have a variable term loan, with the odd lender offering 100% offset accounts on fixed rate loans (eg Adelaide Bank, The Rock Building Society... BankWest offers 40%).

Generally you either have a line of credit or a variable loan with an offset account, so the scenario provided earlier about having an LOC with an offset isn't really within the realms of possibility, however, many SVR loans have redraw facilities which serve a similar purpose, but having a reducing limit if they are P&I.

voigtstr

25-08-2008, 06:35 PM

Its done because once the LOC has been approved doesnt mean that when you want the funds they will be available. For instance...you have a LOC off $100k approved and then 18months later when you need to draw on it, the bank decides to re-asses the situation and then reduces/cancels the LOC. 50% of the reason to have the funds available is when things get tough and thats generally when the bank will baulk at giving you any money

I've got a 20K loc with ING. Are you suggesting that when I go to withdraw it (tranferring it to a transaction account with another bank so that it can be direct credited to the Lawyers trust account) that the bank can say, sorry mate... our credit is to crunchy, you cant have it. I dont think so, its already approved.

PT_Bear

25-08-2008, 07:49 PM

I've got a 20K loc with ING. Are you suggesting that when I go to withdraw it (tranferring it to a transaction account with another bank so that it can be direct credited to the Lawyers trust account) that the bank can say, sorry mate... our credit is to crunchy, you cant have it. I dont think so, its already approved.

It's possible, but in the case of ING it's unlikely. ING started lending with a solid deposit base and a lot of funds under management. They're not as exposed to the credit crunch as most lenders. You'll probably see a lot of other lenders go under before ING.

beekay

26-08-2008, 06:04 PM

Well I gave my accountant feedback and she's treating it as a LOC/loan. She's got no idea what an offset account is. She's really not interested in what I have to say. But that's ok, I'm used to older people ignoring me. I'll find someone else who knows =(.

Time for a new accountant.

edit: My accountant is providing me some info she was sent on what she can and can't deduct. I might chase the ATO myself and see what answer I get from them. I don't want to do anything illegal with my finances!

Boyler_Room

26-08-2008, 06:17 PM

Well at least now you know, beekay! As we thought.

And on a side note, don't let people push you around or think they're better than you just because they're older. It doesn't always mean they know more about what you're trying to do/achieve etc.

Cheers
BR

tdh78au

29-08-2008, 09:47 PM

beekay, I got my response back from the ATO in email today. I sent them a detailed text in contact us ==> email enquiry ... and this is what I get back:

=================================================
The Tax Office Personal Tax Email Enquiries service can only provide general information about a client's Personal Income Tax issues. When your enquiry is specific to your circumstances or relates to complex issues, we recommend you call the office on 13 28 61 between 8.00am and 6.00pm, Monday to Friday.

If you prefer, you may also write to the Tax Office for advice about your taxation obligations in your particular circumstances. Please include your Tax File Number (TFN), your full name (previous and new, if applicable), date of birth, your address (previous and new, if applicable), your signature, details of your request and your contact telephone number.

If you need to send a letter to the Tax Office, you can post it to the address shown on your most recent notice of assessment.

You can also find a list of Tax Office contacts on our Internet site at www.ato.gov.au by clicking the link "Contact us" on the bottom of the page.

If you need to contact the Tax Office please call the Personal Tax Infoline on 13 28 61 between 8.00am and 6.00pm, Monday to Friday.
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I've decided to move onto an accountant who does understand what an offset account is and not to pursue this any further with the ATO.