Interest Deductions using offset account

[Tom Alaka]

Hi Everyone

Quick query... i am in process of refinancing with westpac at the moment.

Some of my equity will be in rocket repay loans, which means that i can only draw the money out to other Westpac accounts ( im having this confirmed by lets procede on this premise for now).

For instance, if i want to put money into a margin lending account with another bank, or make repairs to an IP, then I may have to firstly dump the money into an Westpac offset account.... and then sned the money where I want it.

In such a scenario, have I lost the nexus for claiming interest deductions for these monies??

 

[julia]

Tom,

Based on Domjan's case I think you will lose the nexus if there are private funds in that offset account so to be prudent I would open an account that you only use for investment related purposes.
My claimable loans booklet under free publications on www.bantacs.com.au has more info on Domjan's case.

 

[Tom Alaka]

Thanks Julia, that was a very helpful read. Thank!

So if I leave the savings account empty except when I use it to pump and dump funds from the loan acount to the final destination payee then I should be ok?

Ie $50k in loan account, then draw down $25k to the savings account, then do a bank transfer to the final payee.

Would the nexus be lost if there was already some money in the savings/offset account but these funds related to another investment?

 

[julia]

Would the nexus be lost if there was already some money in the savings/offset account but these funds related to another investment?

Probably not but it would make things messy if you were to sell that other investment so it is better than the account be empty.

 

[Tom Alaka]

Ok thanks for the advice Julia. Much appreciated.