How to structure extra funds? Debt recycling question!

Hi Team,

I'm refinancing my PPOR and getting another 50k in the process. I buy shares on a regular basis and may want to pay down my car debt (deductible). I'm getting a loan with an offset and redraw – so the question is how to best structure this? I currently have a PPOR account + substantial amount in the offset account.

1. Have the money in a split loan – PPOR account 1 and 50k in loan account 2 – However, how will I be able to offset both those accounts?

2. Have it all within the 1 PPOR account and "Redraw" those funds for investment or deductible assets from the PPOR loan account? This would make accounting more difficult however.

3. Just setup another account and park the money there as a 2nd offset account and spend it when I desire on deductible assets - I think many banks allow for multiple offset accounts from the PPOR. I think this should work from a tax perspective as this is "new funds".

Thank you for your help

 

1. Get an offset on each, but why would you want to offset deductible debt?

 

2. Would create a mixed loan and so would 3.
Get some tax advice

 

You're correct - but I won't be using the funds as deductible debt straight away was my concern.

Would this work effectively - Have 1 loan account, put the additional funds into another savings offset account *offsetting the PPOR* and drawing those funds down when required?

 

If you did this you would have some tax problems.

Have a look at my tax tips, I have written dozens on this topic.