Hello everybody,
Ive searched the forum to find out about this issue, to no avail.
Hence my question.
Scenario: IP with IO/variable loan of 300k with an offset account having balance of 150k. Offset Account (lets nickname it as OA) has only recently been set up as a result of topping up my loan and I havent touched the funds as yet. Currently all the interest is tax-deductable, of course, no question around that. Funds sitting in OA are not mine - they are pretty much banks promise to allow me to borrow more against increased equity.
Possible actions:
1. I withdraw 10k, move it across to my share trading account with the intention to buy shares when I find good ones. OA balance goes down to 140k, monthly interest increases a bit.
Question 1: Is the increased interest fully tax-deductible?
2. I deposit into OA 10k from my own, private savings. OA balance goes up to 160k, monthly interest decreases a bit. Tax-deductibility of loan interest stays intact. After some time (say-10 days) I withdraw 10k from OA and move it across to my share trading account with the intention to buy shares when I find good ones. OA balance goes BACK to 150k.
Question 2: Is current interest fully tax-deductible?
3. After another 10 days, I withdraw another 10k from OA and move it across to my share trading account with the intention to buy even more shares OA balance goes down to 140k, monthly interest again increases a bit.
Question 3: Is the increased interest fully tax-deductible?
4. OS balance is 150k I deposit into OA 100k from my own, private savings, just to reduce interest to pay. OA balance goes down to 50k, monthly interest decreases. Tax-deductibility of loan interest stays intact. After 2 months, I withdraw 100k back from OA and spend it on my hobby (sailing cruise). OA balance goes BACK to 150k. Since this was my original savings anyway and I?m merely getting it back, I would assume that tax-deductibility of loan interest on my investment stays intact? Hence my question:
Question 4: Is current interest fully tax-deductible?
Thanks Guys for any clarifications
Anthony
Ive searched the forum to find out about this issue, to no avail.
Hence my question.
Scenario: IP with IO/variable loan of 300k with an offset account having balance of 150k. Offset Account (lets nickname it as OA) has only recently been set up as a result of topping up my loan and I havent touched the funds as yet. Currently all the interest is tax-deductable, of course, no question around that. Funds sitting in OA are not mine - they are pretty much banks promise to allow me to borrow more against increased equity.
Possible actions:
1. I withdraw 10k, move it across to my share trading account with the intention to buy shares when I find good ones. OA balance goes down to 140k, monthly interest increases a bit.
Question 1: Is the increased interest fully tax-deductible?
2. I deposit into OA 10k from my own, private savings. OA balance goes up to 160k, monthly interest decreases a bit. Tax-deductibility of loan interest stays intact. After some time (say-10 days) I withdraw 10k from OA and move it across to my share trading account with the intention to buy shares when I find good ones. OA balance goes BACK to 150k.
Question 2: Is current interest fully tax-deductible?
3. After another 10 days, I withdraw another 10k from OA and move it across to my share trading account with the intention to buy even more shares OA balance goes down to 140k, monthly interest again increases a bit.
Question 3: Is the increased interest fully tax-deductible?
4. OS balance is 150k I deposit into OA 100k from my own, private savings, just to reduce interest to pay. OA balance goes down to 50k, monthly interest decreases. Tax-deductibility of loan interest stays intact. After 2 months, I withdraw 100k back from OA and spend it on my hobby (sailing cruise). OA balance goes BACK to 150k. Since this was my original savings anyway and I?m merely getting it back, I would assume that tax-deductibility of loan interest on my investment stays intact? Hence my question:
Question 4: Is current interest fully tax-deductible?
Thanks Guys for any clarifications
Anthony
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