Changing LOC to Offset

[cgw]

I want to change my LOC to an offset loan. It will cost $300 for the switching fee. The purpose of the loan is for the existing Investment Property.
I want to place money into the offset account, which will reduce the amount of interest paid each month, but then perhaps at some point of time I may want to withdraw this money for a holiday.
Is this interest then tax deductable?
Will the tax man ask me - why did you switch the loan from LOC to offset, and if I explain as per above is it OK by the tax man?

 

[Rolf Latham]

I want to place money into the offset account

Hi CG

What is the source of the money above ?

if its ta paid funds, go for it

If its borrowed from the LOC or elsewhere, nah

ta
rolf