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Paid with PPOR Offset....Will this work?
In its most basic form.... 1. Loan linked to offset is non-deductible 2. Savings in offset Benefit of offset is reduction in interest that is not deductible. Gross-ed up benefit equates to a tax free 4.5% earning rate. All other variants outside this could pose a issue in use. (I said...- Paul@PFI
- Post #34
- Forum: Accounting and Tax
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Paid with PPOR Offset....Will this work?
YES !!! Well said Rob. I see more problems using an offset than I see benefits sometimes. Just yesterday I had a new tax client. They sold down some investments (acquired using loan) and parked proceeds in loan offset. Theory was so they could reacquire new investments another day. I explained...- Paul@PFI
- Post #33
- Forum: Accounting and Tax
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Paid with PPOR Offset....Will this work?
Wylie - That's fairly straight fwd. LOC is a loan. The use of the $ is fine for a loan interest deduction (albeit being a trivial value based on 5% x $170 = $8.50 tax deduction) The problems above relate to use of an offset or through an interposed savings account. A trustee has a...- Paul@PFI
- Post #27
- Forum: Accounting and Tax
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Paid with PPOR Offset....Will this work?
The views taken by the ATO in TD 2012/1 can be applied far far broader than many taxpayers contemplate. If you park borrowed $ into ANY account and then later use them for a deductible purpose the ATO could consider the use of the BORROWED funds was not incurred at that time. Hence...- Paul@PFI
- Post #24
- Forum: Accounting and Tax
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Paid with PPOR Offset....Will this work?
Or if you had redraw on the loan when the new funds were put into the savings account at settlement you could also repay the loan. Then redraw it when the funds are actually needed. My bank (Westpac) explained why they do this so often. Apparently the standard mortgage refers to an advance...- Paul@PFI
- Post #11
- Forum: Accounting and Tax
