another redrawing question

[jonesy427]

hi folks, yet another boring redraw question because i cant find the answers on here.
scenario
redraw say 10k from IP1, into normal bank account (that is linked to loan account), to use as some of the deposit for a new IP.
will the ATO see this as personal use if it goes into noraml account?
can i move that exact amount that i redraw into savings account where the rest of the deposit is and then move the whole lot so i can prove where it goes?

still pretty new to all of this. any help/advice would be great!

 

[Mick C]

hi folks, yet another boring redraw question because i cant find the answers on here.
scenario
redraw say 10k from IP1, into normal bank account (that is linked to loan account), to use as some of the deposit for a new IP.
will the ATO see this as personal use if it goes into noraml account?
can i move that exact amount that i redraw into savings account where the rest of the deposit is and then move the whole lot so i can prove where it goes?

still pretty new to all of this. any help/advice would be great!

In this case - it meets the purpose test (ip) and it's fine.
But this means the funds in the future for IP1 - needs to be forever a IP; if down the track you turn this into a PPOR - the full funds even this redraw would be part of the PPOR.


Regards
Michael

 

[Terryw]

I think there are problems with this.

You would be borrowing to place into a savings account and then using savings to invest. This could break the nexus between the actual borrowings and investing.

Make sure you get proper advice on this in writing before you do it.

 

[jonesy427]

mick - the IP will always stay that way unless we sell, no intention at this stage or in the near future.

terry - could you elaborate more regarding breaking the nexus between borrowing and investing.

what is the purpose of redraw if i cant use it to invest in other opurtunities?

 

[Terryw]

mick - the IP will always stay that way unless we sell, no intention at this stage or in the near future.

terry - could you elaborate more regarding breaking the nexus between borrowing and investing.

what is the purpose of redraw if i cant use it to invest in other opurtunities?

The funds are no longer borrowings once they hit the savings account. Whether the ATO will be this picky or not on an audit is another questions.

What ever you do don't have any other funds in the savings account or you will have even less of a chance.

 

[Rolf Latham]

What ever you do don't have any other funds in the savings account or you will have even less of a chance.

add vegemite to the toast

ta
rolf

 

[jonesy427]

so if instead i redrew the funds in form of bank cheque in name of conveyencor for the deposit wold that be clear enough for the ATO? not even sure i can do it, just thinking.

 

[Terryw]

much safer.

(deposit usually held by the agent in their trust account however)

 

[jonesy427]

yeah, but as long as it goes to something to do witht eh investment adn not into my bank its 'relatively' safer than into my bank n out even if i do make it very easy for em.

thanks guys