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In your case, compound interest will be incurred on funds borrowed, under a line of credit facility, to acquire an income producing asset. As such, the compound interest will be incurred in earning assessable income and will be an allowable deduction.[/I]
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Hi Rod_WA - I've read the ruling you attached, and found it interesting that they don't go into detailing what the Investment income will be used for - Which is pretty much what SamA was implying....
Does anyone know of a ruling where they have specifically stated that Investment Income can/cannot be used to pay off Private borrowings before Investment borrowings? From this ruling, it appears they don't care what the investment income is used for, just the purpose of the loan.
Hart's of course was different, as it was capitalised and a split facility of the one loan essentially from my understanding.