Paying IP costs on credit card

I have a credit card that i have not used in the last year, it has a zero balance.

I am about to renovate my new IP and was hoping to used this credit card for a few of the purchases at Bunnings and other suppliers and then pay the balance at the end of the month with my loan linked to the rental property.

I cant see any problem with this but i am i know that logic doesnt always apply to the tax law. Does anyone have any comments on whether this will cause me any deductible issues with the loan?
 
That seems a very valid approach. You seem to understand that you don't want to use the card for any other purposes and that paying the end of month balance seems to be a refinance.
 
I have a credit card that i have not used in the last year, it has a zero balance.

I am about to renovate my new IP and was hoping to used this credit card for a few of the purchases at Bunnings and other suppliers and then pay the balance at the end of the month with my loan linked to the rental property.

I cant see any problem with this but i am i know that logic doesnt always apply to the tax law. Does anyone have any comments on whether this will cause me any deductible issues with the loan?

A credit card is just a loan facility. So you would be refinancing one loan with another. This doesn't change deductibility.

But if you put non property expenses on the card you will have a mixed purpose loan and cannot simply refinance the investment portion separately unless the loan was split first.

Solution is to not mix payments on the one card.
 
What about if your IP only use card has an annual fee? Can this be tax deductible just like an annual fee on a home loan.

Also what about if it is a rewards based card and you have enough points to exchange for say a $100 myer voucher. Would you need to declare this?
 
Would it be okay to register a supplementary card to handle all the IP related transactions? So all IP expenses would be on that card, and hence it wouldn't be mixed purpose. I know one of my cards allows up to 99 supplementary transactions.
 
Would it be okay to register a supplementary card to handle all the IP related transactions? So all IP expenses would be on that card, and hence it wouldn't be mixed purpose. I know one of my cards allows up to 99 supplementary transactions.

My understanding is supplementary cards come under the same statements as the main card. So that would no work. If it is a different account it could work
 
What about if your IP only use card has an annual fee? Can this be tax deductible just like an annual fee on a home loan.

Also what about if it is a rewards based card and you have enough points to exchange for say a $100 myer voucher. Would you need to declare this?

1. If that's all it has been used for during the year. Yes. If part private use then apportion (maybe)

2. Non-assessable. Despite it having "moneys worth" its not income under ordinary concepts. The ATO Rulings and Practice Stmt consider "business" expenditure to satisfy that test.
 
My understanding is supplementary cards come under the same statements as the main card. So that would no work. If it is a different account it could work

Thanks Terry. Yes they do, albeit in a separate section, but I don't think you can pay them off separately, so ill shelve that idea.
 
Does it make any difference if a credit card is used , but no interest is being paid ? (full amount paid at end of month)

This credit card however was used to purchase products for renovation and also normal expenses/ everyday use.
 
Does it make any difference if a credit card is used , but no interest is being paid ? (full amount paid at end of month)

This credit card however was used to purchase products for renovation and also normal expenses/ everyday use.

Doesn't make a different as it will still be mixed debt. If you are paying the investment portion off with LOC money = cannot.
 
Nope. None of the CC debt is paid off with investment/ LOC money.
Is the purchase for investment (say an oven), still tax deductible?
 
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