Hi all,
As you are all so helpful, I thought I would clear something up which I'm not 100% sure about.
We have an investment loan for our investment properties. We currently rent so don't have a PPOR. Our offset account gets all our salaries paid into it and is what we use to live off. As the offset helps to reduce the tax paid on our investment mortgage, the tax man is helped by our savings. My question is, what happens if you take out a large chunk of money from the offset account to buy a personal item such as a car or go on holiday? The interest on the investment loan will now be higher as we have less savings to offset against the size of the loan. Is this ok with the Tax man (bearing in mind that if we had no offset the interest payments would be much larger).
I hope the above makes sense!
Thanks in advance for your thoughts.
As you are all so helpful, I thought I would clear something up which I'm not 100% sure about.
We have an investment loan for our investment properties. We currently rent so don't have a PPOR. Our offset account gets all our salaries paid into it and is what we use to live off. As the offset helps to reduce the tax paid on our investment mortgage, the tax man is helped by our savings. My question is, what happens if you take out a large chunk of money from the offset account to buy a personal item such as a car or go on holiday? The interest on the investment loan will now be higher as we have less savings to offset against the size of the loan. Is this ok with the Tax man (bearing in mind that if we had no offset the interest payments would be much larger).
I hope the above makes sense!
Thanks in advance for your thoughts.