Tax-deductibility of interest on IP loan with offset account

Do you mean ask the bank to split it into 2 separate loan accounts 270k + 50k?

2. Yes

With splitting, does the end result need to match original loan for ATO to track, or can I add more to one partition of the split at the same time.


Eg:
Instead of 3 loans: 270k std var + 50k loc + 100k loc
Can I do 2 loans: 270k std var + (50k loc + 100k loc) = 150k loc (increase 50k partition by another 100k)?
 
You can split however you like as long as you can argue, on a reasonable basis, which money was used for what and there are no mixed loans.

I wouldn't combine the $50k and $100k loans unless both were used for the same property.
 
I wouldn't combine the $50k and $100k loans unless both were used for the same property.


I need 150k to build a granny flat, so it is used for the same purpose/property. So, I guess it is do-able.

Are you allowed to claim interest deduction from LOC paying outgoings (except bank interest)?
 
I wouldn't combine the $50k and $100k loans unless both were used for the same property.

Interesting.... so if you were to use the LoC as deposits for investing purposes (be it shares or deposits for IPs etc), would I be correct in understanding that a separate sub-account needs to be established for each drawdown even though the purpose for all the drawn down funds are investment purposes?
 
Interesting.... so if you were to use the LoC as deposits for investing purposes (be it shares or deposits for IPs etc), would I be correct in understanding that a separate sub-account needs to be established for each drawdown even though the purpose for all the drawn down funds are investment purposes?

Would be a good idea, but not neccessary
 
Does it work if I create a new clean transaction account that act as a suspense account for the loan to pay suppliers suggested here?

OK, my account told me if I do this, I have to make payment by bank cheque so money going from loan to the suspense transaction account goes out to the supplier on the same day. I wonder if the same applies to direct transfer?

When asked if this method is proven, he said ATO has taken action on someone using this method before and failed. I wonder where I can find details to this case?
 
OK, my account told me if I do this, I have to make payment by bank cheque so money going from loan to the suspense transaction account goes out to the supplier on the same day. I wonder if the same applies to direct transfer?

When asked if this method is proven, he said ATO has taken action on someone using this method before and failed. I wonder where I can find details to this case?

I dont' understand what you are getting at.

You need to borrow money to invest. And do this without mixing it along the way. If you have an empty account, which doesn't necessarily need to be new, you could deposit borrowed money, write a cheque and demonstrate clear source of funds from the loan.
 
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