Debt recycling and tax free thresholds

Discussion in 'Investment Strategy' started by Mr_Cr7, 9th May, 2020.

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  1. Mr_Cr7

    Mr_Cr7 Member

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    Hi all, first time poster.
    I'm interested in using debt recycling to pay down my ppor and will take out some equity in my home to invest into the sharemarket and start the cycle (currently at 50% lvr)

    My wife is currently a stay at home so mum so I am curious if there are any ways to utilise her 18k tax free threshold using this method otherwise i will just deduct any interest accrued from the loan from my taxable income. Any suggestions would be great!
     
  2. Ko Ko Naing

    Ko Ko Naing Mortgage Broker Business Member

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    @Mike A is the person who can legally help you out with this. Anything related to taxation, he is the man. :)
     
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  3. Mr_Cr7

    Mr_Cr7 Member

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    Thank you kind stranger I will send him a message :)
     
  4. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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    The trustee of a discretionary trust could invest and distirbute the income to your wife. But lots of tax issues, especially with trusts and franking credits to get some advice - MikeA knows this area well.
     
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  5. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Who be your lender ?

    ta
    rolf
     
  6. Mr_Cr7

    Mr_Cr7 Member

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    At this stage depends on who will lend to me, my broker has told me ANZ, who I'm currently with, won't let me get any equity out.
     
  7. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Ta

    Coz of equity or serviceability pls ?

    ta
    rolf
     
  8. Mr_Cr7

    Mr_Cr7 Member

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    Serviceability
     
  9. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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    ANZ are not such a good lender for debt recycling, but it is possible. Look at my simple loan structuring strategy which I have implemented for a client with ANZ.

    Tax Tip 13: Simple Loan Structuring Strategy Tax Tip 13: Simple Loan Structuring Strategy
     
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  10. Mr_Cr7

    Mr_Cr7 Member

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    Thanks Terry

    Will read through that, in your experience which lenders do you find are most accomodating to debt recycling? And do you know of any lenders that have softer lending requirements than Anz?
     
  11. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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    AMP and Macquarie are the best two I think. Softness will depend on the circumstances.
     
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  12. Mr_Cr7

    Mr_Cr7 Member

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    Cheers mate will check them out also
     
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