Maintaining deduct ability on PPOR loan with offset accounts

Discussion in 'Accounting & Tax' started by lazyhorse, 19th Mar, 2020.

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  1. lazyhorse

    lazyhorse Active Member

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    Just wondering if possible to split a ppor loan and attach empty offset accounts to each split to redraw into in order to maintain deduct ability.
     
  2. Peter_Tersteeg

    Peter_Tersteeg Well-Known Member

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    I think a bit more explanation is needed here. Your PPOR loan generally isn't tax deductible, so I'm not sure how you expect to 'maintain' this status?

    That said, most lenders do allow you to attach offset accounts to multiple loan splits.
     
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  3. Terry_w

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

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    Tax Tip 1: Parking borrowed money in an offset account Tax Tip 1: Parking borrowed money in an offset account
     
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  4. lazyhorse

    lazyhorse Active Member

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    Thanks for the responses
     
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  5. Paul@PFI

    [email protected] Tax Accounting + SMSF Business Plus Member

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    Yes as Peter indicated the redraw of funds must always consider how the redrawn funds then in a offset are subsequently USED as to whether any is deductible. Most lenders will allow a single offset v a single loan. Few lenders (AMP?) allow multiple offsets vs a single loan. None I am aware of allow multiple loans with one offset and this may be a really foolish idea as it may reblend what was split. Happy to be corrected by our experienced brokers on this offset position
     
  6. craigc

    craigc Well-Known Member

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    From experience CBA have this functionality.
    Not sure about others.
     
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  7. Paul@PFI

    [email protected] Tax Accounting + SMSF Business Plus Member

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    Multiple offsets can be a trap too. It's not unlike crossed loans but quite passive until a sale or refinance occurs
     
  8. Terry_w

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

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    But only if borrowed money parked in them.
     
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