I got this from bantacs.com.au
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Capitalised interest is deductible
Hart’s case would not have had to resort to Part IVA if it wasn’t. If you can’t afford to make the interest payments on your rental property, borrow to pay it then the interest on that loan is deducible as well. As long as it is not a contrived scheme to gain a tax benefit ie you have a genuine reason for not being able to pay the interest.
Please seek advice on your particular circumstances before acting on this information.
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Been reading a lot about capitalised interest and been thinking of getting a LOC. But, as stated above, if I can service my IP with the rental income and salary I currently receive then I SHOULD (???) pay interest and expenses with my earnings as paying via a LOC will be seen as a "contrived scheme to gain a tax benefit." Could somebody confirm this, please?
-------------------------------
Capitalised interest is deductible
Hart’s case would not have had to resort to Part IVA if it wasn’t. If you can’t afford to make the interest payments on your rental property, borrow to pay it then the interest on that loan is deducible as well. As long as it is not a contrived scheme to gain a tax benefit ie you have a genuine reason for not being able to pay the interest.
Please seek advice on your particular circumstances before acting on this information.
------------------------------
Been reading a lot about capitalised interest and been thinking of getting a LOC. But, as stated above, if I can service my IP with the rental income and salary I currently receive then I SHOULD (???) pay interest and expenses with my earnings as paying via a LOC will be seen as a "contrived scheme to gain a tax benefit." Could somebody confirm this, please?