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I agree, it's a way of doing business. Many people in this forum would have no way of servicing their huge loans if it wasn't for the support loans they have established using existing equity. This doesn't mean that people borrow funds from loan A in order to service the same loan as that...

And here is the link to the ruling http://www.ato.gov.au/rba/content.asp?doc=/rba/content/69725.htm Cheers