New IP Title in wife’s name, equity draw joint

Hi all, I’ve had a read through these forums and have found similar topics discussed in terry’s tax tips and the like, but I’m not sure for this scenario.

- We (Wife and I) both jointly own a PPOR.
- We have jointly withdrawn an equity split from our PPOR for the deposit and other costs involved in acquiring an IP.
- The IP we are looking to purchase tomorrow will be positively geared
- we are wanting to put wife’s name on title only as accountant has advised this will be a more appropriate outcome for our situation
- both the equity split application and the new loan application were in BOTH our names.

A couple questions that have just come to mind this sunny Sunday morning which I was hoping someone here may be able to help with.

- can wife claim all tax deductions for interest charges on both our joint loans for if her name only is on the new IP?
a) equity loan split
b) IP loan

- are all future expenses (and positive income claimed) solely against wife’s tax assessment ?


I’ve been mostly quite clear on all this until today I considered the fact we’ve both applied for a new equity loan split against our PPOR for an IP which will be in wife’s name only on the title. Thanks!

 

I have a tax tip on this, deductibility to lie with the owner of the property - with limited exceptions.

 

Not really as the interest is still deductible, it is just that the income exceeds the expense.

 

Yes but also the tax she pays on the income from the investment will be less being a lower income earner.

I just want to confirm she can claim ALL the interest as an expense for joint loans:
1) our PPOR equity split
2) the loan for the IP

 

She probably can. You need to seek specific tax advice.