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Terry, Is storing money in an offset account linked to a PPOR still considered by the ATO as reducing non deductable debt whilst allowing a LOC used for investment debt to capitilise, assuming the principal is never altered. LOC is secured against PPOR.

Thanks Rixter. To the brainstrust out there; If you have a LOC with capitilising interest, either partial or full and have an IO with offset on your PPOR storing the difference in the offset then convert the PPOR to an IP can Part IVA be applied assuming you no longer reside in the PPOR? The...

Based on advice from clients accountants (on more than a few occasions) that I have witnessed I would be hesitant to trust advice via accountants 100% without sign off from the ATO. In saying that your accountant may well be correct Rixter but still not convinced the ATO would agree???

You would need to have a loan split if using a larger LOC that is apportioned to the actual loan you are paying the interest on to "keep it clean" for record keeping purposes. Eg. 300k main LOC could have a sub account of 15k to pay interest on a loan for 300k and refreshed at the end of the...

AKA a "Tax Scheme". Best practice is to pay interest from an external transaction/offset in order to prevent capitilising interest. I do believe you can use a LOC and capitilise interest to pay loan interest as long as it is kept seperate and the interest is not claimed as a tax deduction on...

Looks the goods and a sound foundation to build on. You are among the minority who get it right from the outset.