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Thank you Jason, Well then it would probably be ok from a tax point of view - but everyone should seek their own tax advice.

Jason, thanks for the reply. Your answer is a bit unclear though. What I am trying to ascertain is if the loan and the savings account are separate accounts with separate numbers. Would it be similar to say an ANZ loan and an ANZ offset account?

Jason, Does the 'offset' come with a separate account number and is the contents of this account clearly separated from the loan account?