Bank put money in wrong account

Discussion in 'Accounting & Tax' started by Neko, 20th May, 2017.

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  1. Neko

    Neko New Member

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    Hi, long time lurker finally pushed to post by the stupidity of banks. Hope this is in the right place - concerned about tax implications because of money mixing.

    We have recently purchased an IP (using two loans - deposit to be funded via a loan increase using equity in PPOR and then portfolio loan for the remainder). The bank stuffed up identity documents 3 times and thus delayed approval, so we ended up using a deposit bond (so the money isn't needed until settlement). This evening I went to check our accounts and the bank has, without warning, deposited the loan increase into the offset account attached to PPOR loan rather than the clean offset they were instructed to and assured us they would use (tied to the loan increase). My understanding is that money is now contaminated.

    Being a Friday night there's not much I can do - from my reading here I gather I should possibly be able to repay the money back into its loan, leave it sit there until needed (maybe?) and then redraw to the clean offset. Bank is StG.

    Assuming that (or some other solution is possible), settlement isn't for 7 more weeks so would it be ok to leave the money where it is (fully offsetting PPOR loan and then some ATM) and then fix it later, or would it be best to fix it ASAP?

    The whole thing may or may not be the best set up, it hasn't been set up under the best of circumstances but I'd just like to not have it completely stuffed up before we even get to settlement.

    Any advice appreciated
     
    Perthguy likes this.
  2. pjames

    pjames Well-Known Member

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    Sorry to hear this. Do I need to worry when my property sale settles with ANZ and it goes to my offset account that I will close once I transfer the leftovers to a proper banking institute? I wonder if I can have the solicitor push some to my other banks on settlement or do you need to wait till it's passed the 3 biz days with the mortgage bank and then transfer it to other banks?
     
  3. Paul@PFI

    [email protected] Tax Accounting + SMSF Business Plus Member

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    Can be fixed. Bank must allow redraw.
    1. Deposit funds back to loan
    2. Redraw to your cleared offset
    3. Sweet as
     
    Ross Forrester likes this.
  4. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker Business Member

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    This is something i constantly warn about - bank ****-ups.

    First thing I would do it is to make them try and reverse it. I have tried this with some banks and they say no cannot be done.

    The next option would just be to pay off the loan and reborrow it. Make sure it doesn't close the loan though.
    But this can only be done if the loan is already split.

    btw, your loan structure seems poor - why a portfolio loan for the remainder. You should be using a term loan for the remainder and a portfolio loan for the equity access.
     
    Last edited by a moderator: 20th May, 2017
    Perthguy likes this.
  5. dabbler

    dabbler Well-Known Member

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    They often stuff up, or due to some policy, cannot do what is requested or is a preference, just talk to them about putting the money back into the loan say minus 100 dollars (or whatever amount will not close it off) then drawing it as needed.

    Or if the cash can be moved, move it to the right offset. Do not claim any interest, which you should not be anyways till place is yours.
     
  6. mikey7

    mikey7 Well-Known Member

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    My bank does the same. Each time, I just put all the money back into the loan and redraw when needed (then get charged a redraw fee - what a joke!).
    I made a fuss, and got ~$700 worth of splitting fees forgotten about though :)
     
    Perthguy likes this.