I have an interesting question I cannot find the answer to, I have rung the ATO, but even they did not seem comvinced with their own answer...so here goes...
Assume I bought $100,000 worth of shares with a $100,000 line of credit investment loan.The shares subsequently went up to $200,000 and I now want to sell 50% of my holding, so $100,000 worth of shares.
Do I need to proportionately repay the investment loan, i.e. 50% of $100,000 ($50,000) to retain the deductibility of the entire loan?
I would assume I would, but the ATO surprisingly says you do not have to, as long as the value of the remaining share portfolio is still higher than the original loan (i.e. $100,000)...
Any advice is appreciated!!
Nougati
Assume I bought $100,000 worth of shares with a $100,000 line of credit investment loan.The shares subsequently went up to $200,000 and I now want to sell 50% of my holding, so $100,000 worth of shares.
Do I need to proportionately repay the investment loan, i.e. 50% of $100,000 ($50,000) to retain the deductibility of the entire loan?
I would assume I would, but the ATO surprisingly says you do not have to, as long as the value of the remaining share portfolio is still higher than the original loan (i.e. $100,000)...
Any advice is appreciated!!
Nougati