Split Loan

[Brett IP]

Good Afternoon

For the experts

Can you have a split loan against an IP for which interest on 200k IO (2/3) is claimable & interest on 100k IO (1/3) isnt, but have an offset attached to the 100k portion & make extra payments only on the 100k portion?

Or for something like this should you get 2 completely seperate loans against the one property. From the ATO rules, it seems to be OK as long as you dont let the interest on the 200k capitalise (grow) so I would pay the IO amount on the 200k so it doesnt grow.

 

[Evachange]

Can't see why not, just need to get it set up that way.

 

[Bradsdad]

A "split" loan would suggest 2 seperate loans. The set-up looks fine to me

 

[Brett IP]

Thanks for the coments, just trying to be certain to avoid mistakes now and in the future.

Thought the ATO may make you apportion repayments as doesnt a split mean it is one facility split in to two sub accounts?

 

[Rolf Latham]

Hiya

If you have 2 separate accounts for the different purposes you should be ok.

However, with the recent PBR posted about debt recycling, one cant be sure of much anymore.


ta
rolf

 

[Brett IP]

Thanks Rolf, thats true.

Isnt that in relation to growing/capitalising debt though?

Under my set up the debt would remain at approx 200k & the monthly IO payment would always be the same (excluding I Rate fluctuations) on that portion.

 

[peaches]

It is the purpose of the borrowing that defines the deductibility as long as you get separate statements showing the interest and charges - you can have a non-deductible split - people do it all the time. I don't see how you can have two loans against one security without an expensive and inconvenient second mortgage.

 

[Brett IP]

Agreed, split it is. Just wanted to clarify

Was thinking of old threads however the problem there was that they didnt have a split, they apportioned the one loan. This ofcoarse is the whole reason to use a split, for ongoing ease.

Thanks