No offence intended, however would you mind pointing me to the section of the ITAA which says you can't. After all, the loan would be on his PPoR and for private use at the time.
The intent may have not been there but it still occured. I wasn't after a smartass answer and asked a simple question.
From your post...
".....Importantly I did not mention LoC, so sticking with Redraw vs Offset and inline with your earlier comment on the 'purpose test', providing the funds are drawn out of the current loan prior to the conversion and the loan is fully drawn at the time of conversion (i.e. no redraw)
there should be no impact."
Even without knowing who you are or what you do for a crust, your comments within this thread could lead one to believe you work within the industry. If so you above comment could be taken as advice, advice that some members of this forum could take action on.
I am of a differing opinion when it comes to redrawing funds under the conditions set out in this thread. The original loan was taken out to acquire the property, on top of this costs and/or LMI may have been added. let's now say the client deposits a lump sum of $50k into the loan. Great!!! Some interest saved whilst it's a PPOR. No comes time to change it to an IP. The $50k is now taken out to purchase new PPOR. The purpose of these funds isn't for investment and as i understand (as do some others including accountant I have spoken with) they cannot be claimed. i
always however request that my clients discuss this with their accountant as I cannot legally advise them on it.
I'm quite happy to be corrected (including your spell checks) as I treat myself as a professional and was asking what I thought was a simple question. You are the one who refered to the link and I assume you based your comments to some reference there. I on the other hand cannot see where it says the discussed scenario isn't impacted.
Finally,
As much as I enjoy discussions on this forum and the diverse opinions, I don't believe it's a place to for any hidden agendas. I am starting to get the impression however that there may be one.
Regards
Steve
PS......any spelling or typing mistakes are solely the responsibility of the typist and not the keyboard, no matter how much the typist refutes it.