personal loan

[darcy13]

Hi All
quick question, I'm settling on a house this week and it was orginally planned that the loan would be 95% LVR but at the last moment it was changed to 90% which left me about 10K short of funds (got 30K just to be safe ), so to make up the difference I had to take out a personal loan at 12.99%. Now the question is will the interest on money used from this loan be tax deductable, this loan will only ever be used on IP related expenses ?
stuart

 

[Perp]

Now the question is will the interest on money used from this loan be tax deductable, this loan will only ever be used on IP related expenses ?

Yes! Just make sure you can demonstrate the use for investment purposes and you'll be fine.

 

[Rob Williams]

Like Ozperp suggests, keep good records. When you buy things of a personal nature, make sure you can show that it was funded by personal funds, not the personal loan for which you are claiming interest.
The deductability of the interest is based on the purpose of the funds, not the underlying security for the loan.

 

[dr.jauncey]

Hi, try to make sure that the funds go directly from the personal loan to the person receiving payment for your investment costs. If the funds go via your personal transaction account first then this may be enough to taint the loan in many cases.

Otherwise yes, if the funds are used directly and solely for investment purposes then you shouldn't have a problem.