I have an investment loan on an IP and a line of credit that is used to pay the interest bill and any rental expenses. The rent goes into my normal account and I top up the LOC as required - to cover the interest etc. The LOC is never used for non-investment/ deductable purposes!
I heard the ATO was getting strict on this setup because I could use the rent income for purposes other than investment purposes - like pay my bills before the IP loan, or pay down a personal loan (which I don't have...) etc. and this could be considered tax avoidance?
Has there been any recent developments or rulings to 'clarify' this?
I heard the ATO was getting strict on this setup because I could use the rent income for purposes other than investment purposes - like pay my bills before the IP loan, or pay down a personal loan (which I don't have...) etc. and this could be considered tax avoidance?
Has there been any recent developments or rulings to 'clarify' this?