Hi - I'm trying to work out the "acceptability" of the following senario. I'm not sure if I'm breaking any tax laws (ie avoiding interest)....
IP 1: Standand interest only loan (Bank 1)
IP 2: Standand interest only loan (Bank 1)
IP 3: Standand interest only loan with offset account (Bank 1)
All rental income goes into Bank 1 offset account. Have Bank 1 CC to pay all expenses. We have to "top up" Bank 1 from Bank 2 offset account.
IP 4: WAS our PPOR. This is a stand IO loan with Bank 2 - but holds an offset account that has our "personal savings" in it. Rent from this currently goes to Bank 1 offset. Repayments currently come from Bank 2 offset. Other expenses from Bank 1 CC.
PPOR - Loan is NOT with a bank (hence the Offset on IP 4 still holding the majority of our "personal money"). Repayments will be made from Bank 2 offset.
I track all money (income, expenses both property and personal) through Quicken and use this at Tax time.
Questions:
1. Can be get rid of Bank 1 offset and run ALL income and expenses straight out of Bank 2 offset? I can't see a problem from a tax POV as it is an offset account (and not a LOC)? I'm trying to simplify everything.
2. Would this be the same with the CC expenses? Could I just use our personal one?
3. While we lived in our PPOR, we did "refinance" to have a larger amount of money in our offset. I suspect this additional amount can't be moved to our new PPOR in the future (ie if we change that loan to a bank whereby it has the ability to have an offset). I envision the "not drawn up amount" is still ours to move though?
Would appreciate any other thoughts or wisdom as it is all very confusing at the moment!
IP 1: Standand interest only loan (Bank 1)
IP 2: Standand interest only loan (Bank 1)
IP 3: Standand interest only loan with offset account (Bank 1)
All rental income goes into Bank 1 offset account. Have Bank 1 CC to pay all expenses. We have to "top up" Bank 1 from Bank 2 offset account.
IP 4: WAS our PPOR. This is a stand IO loan with Bank 2 - but holds an offset account that has our "personal savings" in it. Rent from this currently goes to Bank 1 offset. Repayments currently come from Bank 2 offset. Other expenses from Bank 1 CC.
PPOR - Loan is NOT with a bank (hence the Offset on IP 4 still holding the majority of our "personal money"). Repayments will be made from Bank 2 offset.
I track all money (income, expenses both property and personal) through Quicken and use this at Tax time.
Questions:
1. Can be get rid of Bank 1 offset and run ALL income and expenses straight out of Bank 2 offset? I can't see a problem from a tax POV as it is an offset account (and not a LOC)? I'm trying to simplify everything.
2. Would this be the same with the CC expenses? Could I just use our personal one?
3. While we lived in our PPOR, we did "refinance" to have a larger amount of money in our offset. I suspect this additional amount can't be moved to our new PPOR in the future (ie if we change that loan to a bank whereby it has the ability to have an offset). I envision the "not drawn up amount" is still ours to move though?
Would appreciate any other thoughts or wisdom as it is all very confusing at the moment!