Avoiding margin loan interest rates

I am looking for some advice on loan interest deductability.

My PPOR has a large mortgage against it but I have an offset account which covers all of the interest.

I am looking to borrow money to build up my share portfolio. I have a margin loan facility available but the interest rate on this facility is fairly high (9.4%).

Can I draw down on my offset account with the sole purpose to buy the shares and then claim a tax deduction against the interest charged on my mortgage?
 
The easy answer is no. You would be paying cash in that situation.

You would have to pay that money into your loan and then get a separate loan on your house for the same amount (as cash payment) and then purchase shares with the new loan.
 
Pay your house off in full (move the money from the offset account to the loan account).

Redraw the money from the loan for 'investment purposes'.

As 100% of the money drawn on the loan is for investment purposes, you should be able to deduct the interest component of the loan.
 
Thanks for the tips guys.

Next problem with using borrowing money secured against my PPOR for buying shares. I own the PPOR jointly with my wife but would like to buy the shares in my name only to maximise the tax deduction as I pay a higher marginal tax rate.

Would I be able to claim a tax deduction against 100% of the loan interest as all the shares would be in my name or would I only be able to claim 50% of the tax deduction as it would be deemed that my wife and I had borrowed 50% of the money each.
 
As I understand it you can claim 100% of the interest as you are borrowing it and in turn buying the shares 100% in your name.

The PPOR is simply the security held for the loan with no reference as to actually owns it.

Cheers
 
As I understand it you can claim 100% of the interest as you are borrowing it and in turn buying the shares 100% in your name.

The PPOR is simply the security held for the loan with no reference as to actually owns it.

Cheers

correct

the ato doesn't care if the security for the loan was granny.
 
Think about it.

You are borrowing money to put a deposit (borrowing the rest) on some shares in a company which will be geared up anyway. Lotta debt there. :eek: OK Not so much today but a few years ago they were, and investors copped a bath. Your plan could have bankrupted you if you didn't have tight stops.

How sure are you that we are not headed for a double dip? Do you know of safe companies anyway? I wouldn't put borrowed money into the banks, and that seems to be the first choice here.
 
correct

the ato doesn't care if the security for the loan was granny.

Even if the loan was in both names to follow the banks security ownership? So when the ATO asks you need to then prove that the joint loan was only used by you? Unless the bank can offer you loan in your name only for a jointly owned property.
 
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