Funny to see these journalists write a whole article and then not mention the only things that really matter in making the decision. No wonder they do what they do.
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Funny to see these journalists write a whole article and then not mention the only things that really matter in making the decision. No wonder they do what they do.
to be fair, to a lot of people redraw or offset dont really matter to themactually, its worse.............
The quoted industry expert doesnt make the distinction.
Now folks might understand why I have such a dislike of some the "comparison" sites, and the quoting of lenders' trophy or medals from these comparisons.
They like to compare oranges to carrots because they have the same colour, and as thus the comparisons arent worth a banana many times, and in the real world, for many consumers, their 5 star ratings may be even worth less than a banana.
ta
rolf
to be fair, to a lot of people redraw or offset dont really matter to them
hi
I don't see what the fuss is about........just add up the actual amounts of monthly interest paid from the off-set during the financial year and that is what you claim.
ANZ off-set is stock standard seperate transaction account and so the loan amount has not changed just the amount of interest being changed.
to be fair, to a lot of people redraw or offset dont really matter to them
Funny how we sometimes try and complicate something so simple - often a misunderstanding due to lack of knowledge which can go on for years before corrected, sometimes only by someone picking up on a minor passing comment! I have never has any trouble on working out interest claimable - simple as MikeF said. But I (and others) have to be careful on mixing accounts. I believe I have myself covered - but willing to be corrected.
I currently have and offset account linked to a loan which consists of some unused loan money, personal savings which existed in another account before being tipped into the offset account, deposits from various sources (non loan or IP related), and rental income. From this I withdraw money for personal needs, interest on the loan (whatever the amount is which is not offset), and other IP expenses. I have always maintained a balance well in excess of the unused loan money (and rental income to be doubly cautious), so my argument is that all personal money withdrawn is from money I have deposited from sources other than rental or borrowings. It is like having two accounts within one with an imaginary wall between them - lets say side A is unused loan money/IP expenses and rental income and side B is private deposits/general everyday account.
As per what I was advised my Nick Moustacas (Strategic Wealth Management) at a seminar once, interest can be paid out of borrowings (side A) and rental income can go into an account for private purposes (side B). As long as I never eat into what remains of side A for person expenses I should be safe. Although not necessary, I count rental income as going into side A in case there ever is a debate on where it should go - at least until I need it . I have a spread sheet set up to keep a record of every cent spent and what category it falls into, plus rental income/management fees updated annually. I know what the property has cost me to the cent before and after rental income is taken into account.
I read in a magazine once where mixing accounts can get confusing and bought an investor undone in the eyes of the tax man, (which I don't think applies in my situation):
She had two accounts - a private everyday account and a loan account of some description. She paid some IP expenses out of her everyday account and then reimbursed her private account by the same amount from her loan account. (I can see many reasons why this may have been done). This seems like a straight forward matter and all interest incurred by her loan was claimed. However the taxation dept saw this differently - they did not see the link, only that she used loan money to top up her private everyday account and therefore she could not claim interest on this amount. You would think that common sense would prevail as it is quite clear what occurred, but no!
If you have borrowed money and placed it into an offset account and then later put unborrowed money in that same account then you have contaminated the loan.
let me explain with an analogy:
Urinate into a bottle and then place water into the same bottle. Say 50% each. Then when you get thirsty take out a glass of 'water' to drink. Using a spreadsheet you could say all the water is actually water and that you haven't used the urine part. Would you drink it?
Don't forget TR 2000/2
Second Exception - Refinancing mixed purpose debt
18. A taxpayer may choose to refinance a debt outstanding on a mixed purpose sub-account by borrowing an equivalent amount under two separate accounts or sub-accounts. If the sums borrowed under those two separate accounts are equivalent to the respective income producing and non-income producing parts of the existing outstanding debt, we accept that interest accrued on the debt incurred in refinancing the income producing portion of the mixed purpose debt will be deductible.
Check out TR 93/6 for the ATO view on effective offset accounts.
Cheers,
Rob