I have filed for a private ruling, as to the deductibility of capitalised interest from LOC secured against a PPOR to service the IP loan. Talking to the ATO they accept that it tax deductible under 8-1 but are looking closely at applying part IVA.
The ATO officer drew my attention to the recently released TD 2011 /D8
(http://law.ato.gov.au/atolaw/view.htm?docid="DXT/TD2011D8/NAT/ATO/00001")
My initial request for a private ruling on whether part IVA does/doesn't apply reasoning was:
1. to own my home sooner, and
2. to take advantage of the current undervaluations in the investment purchased, and
3. to fund the investment without affecting personal cash flow.
Since option 1 is off the table, and it is grey area, they have given me time to formulate a reasonable response that other than a tax advantage, why would I establish my finances in this way?
Or in the ATO's words. if the tax man didn't exist, would you structure your affairs in this way? (My first thought was, but the taxman does exist, I know cause I am talking to him. Lucky I held my tongue!).
Considering my Taxation skills are limited, any advice is welcome.
The ATO officer drew my attention to the recently released TD 2011 /D8
(http://law.ato.gov.au/atolaw/view.htm?docid="DXT/TD2011D8/NAT/ATO/00001")
My initial request for a private ruling on whether part IVA does/doesn't apply reasoning was:
1. to own my home sooner, and
2. to take advantage of the current undervaluations in the investment purchased, and
3. to fund the investment without affecting personal cash flow.
Since option 1 is off the table, and it is grey area, they have given me time to formulate a reasonable response that other than a tax advantage, why would I establish my finances in this way?
Or in the ATO's words. if the tax man didn't exist, would you structure your affairs in this way? (My first thought was, but the taxman does exist, I know cause I am talking to him. Lucky I held my tongue!).
Considering my Taxation skills are limited, any advice is welcome.