Mixed use loan

Jess Peletier

• 23rd Nov, 2014

• #1

Hi all,

Just a quick question - if I have a mixed use loan that I pay off to a zero balance, can I then redraw the funds for investment purposes only and claim deductions?

My thought is yes, but want to be sure the ATO will agree

Thanks!

 

R

Rolf Latham

• 23rd Nov, 2014

• #2

im not the ATO nor a tax guy

but id say yes

ta

rlf

 

Terry_w

• 23rd Nov, 2014

• #3

Generally the redrawn amount will be new borrowings and there should be no mixing involved if the balance is paid down to zero first.

 

Jess Peletier

• 23rd Nov, 2014

• #4

Perfect, thank you!

 

Jamie M

• 23rd Nov, 2014

• #5

Sounds sweet to me Jess - but I'm not a bean counter.

Cheers

Jamie

 

Jess Peletier

• 23rd Nov, 2014

• #6

Ha - lots of things sound sweet to me, until the guys who know things tell me no.

Anything is possible...until you speak to an accountant

 

M

maloriopolium

• 25th Nov, 2014

• #7

Wouldn't the loan automatically close if you pay it off and have a zero balance?

 

R

Rolf Latham

• 25th Nov, 2014

• #8

maloriopolium said:

Wouldn't the loan automatically close if you pay it off and have a zero balance?

Click to expand...

must be CBA user

most lenders are ok with it

ta
rolf

 

Peter_Tersteeg

• 25th Nov, 2014

• #9

I've had clients consult their accountants on this and it's been okay, but of course everyone's different...

Jess Peletier said:

Ha - lots of things sound sweet to me, until the guys who know things tell me no.

Anything is possible...until you speak to an accountant

Click to expand...

... and then you talk to a lawyer, it's possible again, for a nice fee.

 

Paul@PFI

• 25th Nov, 2014

• #10

Jess Peletier said:

Hi all,

Just a quick question - if I have a mixed use loan that I pay off to a zero balance, can I then redraw the funds for investment purposes only and claim deductions?

My thought is yes, but want to be sure the ATO will agree

Thanks!

Click to expand...

Now lets get the true tax answer. Its maybe.

If the investment is intended to earn income such as dividend paying shares, interest, rental income from property etc then Yes. You don't even have to acquire the investment. The cost may be to improve it or even pay outgoings associated with it (ie strata levies)

If the investment is one which is anticipated to make a future windfall profit alone then its likely that the answer is no. eg Buying shares in a company that doesn't pay divs but you think the price will go up.

 

Jess Peletier

• 26th Nov, 2014

• #11

Thanks Paul, much appreciated