Loan between husband & wife

[VaSSagO]

I was wondering what the ATO's view on this is?

Situation is we have just purchase IP#4 in my wifes name. This is a block of land which we will build on and then hold. Once completed it should be worth ~25% more than the cost.

Looking at drawing up a loan agreement between my wife and I for the funds for the deposit and stamps etc non-interest bearing which can then be repaid when property is refinanced on completion. Hence we can get get our cash back out of it for the next purchase and all the debt would be tax deductibe.

Thoughts?

 

[Terry_w]

I was wondering what the ATO's view on this is?

Situation is we have just purchase IP#4 in my wifes name. This is a block of land which we will build on and then hold. Once completed it should be worth ~25% more than the cost.

Looking at drawing up a loan agreement between my wife and I for the funds for the deposit and stamps etc non-interest bearing which can then be repaid when property is refinanced on completion. Hence we can get get our cash back out of it for the next purchase and all the debt would be tax deductibe.

Thoughts?

Could be possible depending on a few things.

 

[Paul@PFI]

Spouse loans

"We just purchased" and only now you are going to establish a loan...

This little aspect is where many arrangements fail. I'm assume you have just contracted... No issue. You might be surpised how many people try and redo these things after they occur. It is essential that the loan proceeds can be traced from the lender to the direct acquisition or payment of those outgoings. Dates need to align. Not agreements drawn up three weeks after the event which try to paint a loan which never actually occurred. If not, the loan may be considered a sham and when its all refinanced later the nexus cannot be made to that original acqusition.

The refinance later is same. Important that the old loan is repaid by new loan. Not just forgiven or assumed to be made. Traced directly from loan to repayment.