Debt recycling or not?

[ericproperty]

Hi guys

have read some interesting posts here about debt recycling, sounds a good strategy to fund IPs, however, what are the risks associate with Debt Recycling (? ATO)?

thanks

 

[Terry_w]

Hi guys

have read some interesting posts here about debt recycling, sounds a good strategy to fund IPs, however, what are the risks associate with Debt Recycling (? ATO)?

thanks

depends what you mean by debt recycling. Part IVA needs to be considered, but that doesn't mean you can't borrow to buy income producing shares and using the cashflow to help pay off the non deductible debt.!

 

[Corey Batt]

Debt recycling is a great way to assist in reducing down non deductible debt, moreso than funding more IP's, as there is no net increase in equity available. In saying that it does assist in a marginal serviceability boost.

Follow the rules and the ATO won't punish you - it's not a grey area for the most part.

 

[ericproperty]

thanks Terry and CJay