Many of you would know of, or have access to schemes that allow you to sacrifice part of your salary into such things as Super, motor vehicles, airline membership, childcare, laptop computers etc. My employer allows me to sacrifice into all of these things, but I was recently looking into other things that you may be able to salary sacrifice into. One of these was salary sacrificing to pay off interest on investment loans.
At first, I thought this sounded fantastic. Pay for interest on investment loans from pre-tax salary, thus reducing tax paid on salary. However, on thinking the issue through a bit, I wondered whether simply claiming the interest paid as a deduction, either at the end of the FY or throughout the year via s221D, had exactly the same effect as Salary Sacrificing to pay or pre-pay interest from pre tax salary.
Now I'm not so sure. Surely if you salaray sacrifice to pay for interest on an investment, you can't then claim that interest paid as a deduction come tax time.
Any thoughts from the floor?
Pierre
At first, I thought this sounded fantastic. Pay for interest on investment loans from pre-tax salary, thus reducing tax paid on salary. However, on thinking the issue through a bit, I wondered whether simply claiming the interest paid as a deduction, either at the end of the FY or throughout the year via s221D, had exactly the same effect as Salary Sacrificing to pay or pre-pay interest from pre tax salary.
Now I'm not so sure. Surely if you salaray sacrifice to pay for interest on an investment, you can't then claim that interest paid as a deduction come tax time.
Any thoughts from the floor?
Pierre