Switch LOC to Offset

I am thinking of changing one of my LOC to somehow have an offset account linked to it, this way I can put all my savings in it and pay less interest.
Later I can take the savings out, and all the interest is still dedutable.
If the tax office asks why I changed to an offset, does it matter?
As long as I don't say "I changed to save paying tax?"
 
If the tax office asks why I changed to an offset, does it matter?
"

No it doesn't matter and they won't ask but is the LOC against your PPOR loan?
A LOC sometimes is a better option but you generally pay a little higher interest. Which lender are you with?
If you want to make the LOC amount you withdraw deductible you simply need to use it for the purchase of an investment property, shares etc.
 
But if you have been putting in and taking out money for non-deductible expenses (day to day living costs), not the full amount in the LOC will be tax-deductible and the interest deductions will have to be pro-rated.
 
Back
Top