offset account and investment property loan

hi

Does anyone know the tax law regarding depositing money in an offset account linked to an investment property loan.

I have spoken to the ATO and my accountant has spoken to them and we keep getting different answers.

We have basically been told that any significant cash deposit sitting against a investment loan will be seen as though we have paid off the loan and therefore we will not be able to claim the interest costs when we reinvest the capital. We have also been told that we can leave the money there and move it again with no tax consequence.

Just looking for clarity.

thanks.
 
hi

Does anyone know the tax law regarding depositing money in an offset account linked to an investment property loan.

I have spoken to the ATO and my accountant has spoken to them and we keep getting different answers.

We have basically been told that any significant cash deposit sitting against a investment loan will be seen as though we have paid off the loan and therefore we will not be able to claim the interest costs when we reinvest the capital. We have also been told that we can leave the money there and move it again with no tax consequence.

Just looking for clarity.

thanks.

Imno tax guy, just been playing this finance fun for a while

if the funds sit in a proper discrete offset, the loan has never been repaid.

your interest will reduce while the funds are parked

ta

rolf
 
I am sure one of finance guys will be able to confirm, but from my understanding if its offset account you can have money there and reinvest it later without any tax consequences.

It has to be offset account, not redraw facility on the loan
 
An offset account is a savings account attacched to theloan. Depositing into the offset will not be the same as paying off the loan. It will have no tax consequence in putting money in or taking out other than it will temporarily reduce the interest payable on the loan.
 
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