Keeping track of loans when switching lenders

Discussion in 'Accounting & Tax' started by freddy, 17th Mar, 2022.

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  1. freddy

    freddy Well-Known Member

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    Obviously over a 30 year period let’s say it’s unrealistic to assume you will stay with same lender for IPs. Therefore, how to keep track when transferring from one to another especially when start using equity release deposits for next IPs.
    - I would think maintain same splits from old to new
    - statements downloads
     
  2. Terry_w

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

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    You would need to prove where the funds to acquire and improve a property came from if claiming interest or using interest as a cost base expense. legally too you might want to keep track of the funds
     
  3. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    The typical ATO requirement when they review any property schedule is to request
    • Settlement information back to acquisition
    • Original loan statements and
    • All subsequent loan refinance statements etc and they pay particular attention to changes in the loan amount/s.
    • They pay particular attention to DEBITS (ie new borrowings) and also require copy of the supporting information / invoice / costs for every one of them to ensure the outgoing relates to acquisition, improvements or expnses relating to the property
    • Where any borrowing is mixed /blended or without substantiation they expect a calculation of the deductible v non-deductible as well. It is NOT their job to adjust deductions. They will cancel the deduction if the taxpayer cant satisfy them concerning it being reasonable. The taxpayer can then object. In reality they will give you a period of time to perform the calcualtions and send it to them.
    It is wise to consider filing and retaining this information and maintain it.
     
    Terry_w likes this.