When a re-draw is made from a loan (IP or PPOR), then we all understand the ATO considers this a "new loan", and interest deductability tests will apply. But does the ATO still apply the same rules in reverse situation?
You have a PPOR loan and some cash in offset account (good place to put cash in case PPOR becames an IP one day). If cash is used for investing, no deductable interest is created and non-deductable increases. Not the most efficient arrangement.
So, put the cash into PPOR loan instead, then redraw to make that "new loan". Interest will be deductable if used to produce income (IP, shares etc)
Is this ATO safe ?
You have a PPOR loan and some cash in offset account (good place to put cash in case PPOR becames an IP one day). If cash is used for investing, no deductable interest is created and non-deductable increases. Not the most efficient arrangement.
So, put the cash into PPOR loan instead, then redraw to make that "new loan". Interest will be deductable if used to produce income (IP, shares etc)
Is this ATO safe ?
Last edited: