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This ruling appears to apply where you have a LOC that you use to pay interest and the LOC is secured by the PPOR. Were the LOC secured by an IP, it would appear to be outside the scope of this ruling. While the principle of interest on interest is acceptable under the general rules, the ATO...

Terry, one distinctive point seems to be that the LOC is secured by the PPOR. To me, this reads like a variation of the split loan ruling, applicable to a narrow set of circumstances. Specifically from the conclusion (italics are quotes): The scheme entered into is considered to be dependant on...