IP Offset Account in Spouse's name

Hi
Situation:
- IP just purchased in my name. Ie not joint
- me paying highest marginal tax rate
- wife at lowest marginal tax rate
- no other debt except IP

Question
- will the bank allow the offset to be in wifes name
- if so will this mean offset interest assesable to her at loan rate
- i get deduction for full loan interest

Thanks

 

nope, and even if they did it would be reducing interest on your loan.

 

Even if a bank did allow that, How would it change anything ? An offset doesnt add any income. It merely reduces loan interest charged on the IP in your name. ie interest is only charged on the net balance (loan minus offset).

 

Why did you buy it in your own name?

 

The loan account and its offset account must have identical account holder name(s). But if you want your wife to have / share access to the funds in your offset account, you can probably apply to add her as an additional cardholder.

 

to maximise the benefits of negative gearing. Rent does not cover interest.

 

As far as I'm aware, all lenders require the names on the offset accounts to match the names on the loan.

 

what happens when you put money in the offset and then it becomes positive cash flow?

 

Either A B or C from below
A- transfer money from the offset to the wife to keep it neutral
B- use the QLD stamp duty exemption to transfer 50% to the wife
C- move into the house. We bought it as our future PPOR - not really as an investment

 

the QLD duty exemption is very limited and couldn't apply in a meaningful way for your situation.
Tax Tip 101: Transfers Between Spouses and Stamp Duty in QLD Tax Tip 68: Transfers Between Spouses and Stamp Duty in NSW

 

QLD duties law has indirect and direct duties and few exemptions