Capitalising Interest

[turk]

At the moment I have a IP, val. $600k With a $120k P&I loan & a $100 LOC.(not being used)
I will be buying a PPOR soon and would like a structure where the interest on the IP is captilised, with the rent going into an offset ccount against the PPOR.Any advise would be greatly appreciated.

 

[BV]

is your IP in UK?

 

[turk]

is your IP in UK?

No, arrived back in October, time to update profile.

 

[gooram]

There's been alot of threads about this recently... do a search on "capitalising interest".

Here are a few good ones:

http://www.somersoft.com/forums/showthread.php?t=30087
http://www.somersoft.com/forums/showthread.php?t=26532&highlight=capitalise+interest

FYI, my accountant tells me this is illegal, however others are doing it with and without private rulings from the ATO... all a little confusing really.

 

[Rolf Latham]

Illegal :O)

Some will say that we cant claim it, others will.

The concensus appears to be that correctly set up and for the right reasons, capping interest on investment loans is fine

ta
rolf

 

[Medine]

There's been a lot of discussion on this in the tax forum since new ATO tax rulings in the first half of 2006.

Cheers, Medine