Hi all
I have just received a top up on my IP loan which is currently sat ready to be used as required. I would like to know what the best way to track the usage of the funds for tax purposes. Basically my current accounts are set up is as follows:
Bank A:
Acc 1: Offset account with all savings deposited in mainly savings for investments but also personal emergency funds.
Acc 2: existing Mortgage against IP which now includes additional funds made available from top up for me to spend.
Note: offset is linked to ip as no non dedutable debt
Bank B:
Acc 1 : Every day account for personal spending wages also get deposited here
Acc 2: credit card used for personal use and paying odd IP bills
Now I have the funds in my top up and I want to use them initially for a reno on my IP so today I was going to drop into Bunnings and buy all the things I need I.e cooker, timber, paint etc etc as I will be doing part of the work myself but then had a think on how to purchase these goods while keeping the loan tax dedutable.
Basically I was going to go to Bunnings and buy all the things I need on my credit card (acc 2 with bank B) but then to pay my credit card bill (only the amount I spend At Bunnings) with the loan funds I would have to transfer the funds from my loan in acc 2 bank A to acc 1 bank A then transfer this to bank B acc 1 then to bank B acc 2 to pay my credit card bill as I cannot transfer funds directly. The alternative to this is to buy the things in Bunnings with my debit card with bank A acc 1 then transfer the funds from acc 2 loan to pay this off.
I'm just concerned with mixing the loan funds with other savings etc as I don't want to loose the tax deductibility of the loan. I would only transfer the exact funds I used I.e if my bill at Bunnings was say $1,870 I would transfer this exact amount from the loan to the accounts with a reference on the transfer stating its for Bunnings so there was traceability, I wouldn't transfer say $2,000.
I'm sure this is a common issue that occurs but just wanted to get I right as I want to buy things today but cannot speak to my accountant until tomorrow.
I have just received a top up on my IP loan which is currently sat ready to be used as required. I would like to know what the best way to track the usage of the funds for tax purposes. Basically my current accounts are set up is as follows:
Bank A:
Acc 1: Offset account with all savings deposited in mainly savings for investments but also personal emergency funds.
Acc 2: existing Mortgage against IP which now includes additional funds made available from top up for me to spend.
Note: offset is linked to ip as no non dedutable debt
Bank B:
Acc 1 : Every day account for personal spending wages also get deposited here
Acc 2: credit card used for personal use and paying odd IP bills
Now I have the funds in my top up and I want to use them initially for a reno on my IP so today I was going to drop into Bunnings and buy all the things I need I.e cooker, timber, paint etc etc as I will be doing part of the work myself but then had a think on how to purchase these goods while keeping the loan tax dedutable.
Basically I was going to go to Bunnings and buy all the things I need on my credit card (acc 2 with bank B) but then to pay my credit card bill (only the amount I spend At Bunnings) with the loan funds I would have to transfer the funds from my loan in acc 2 bank A to acc 1 bank A then transfer this to bank B acc 1 then to bank B acc 2 to pay my credit card bill as I cannot transfer funds directly. The alternative to this is to buy the things in Bunnings with my debit card with bank A acc 1 then transfer the funds from acc 2 loan to pay this off.
I'm just concerned with mixing the loan funds with other savings etc as I don't want to loose the tax deductibility of the loan. I would only transfer the exact funds I used I.e if my bill at Bunnings was say $1,870 I would transfer this exact amount from the loan to the accounts with a reference on the transfer stating its for Bunnings so there was traceability, I wouldn't transfer say $2,000.
I'm sure this is a common issue that occurs but just wanted to get I right as I want to buy things today but cannot speak to my accountant until tomorrow.