Redraw from wife's loan account

Discussion in 'Loans & Mortgage Brokers' started by Lincsus, 3rd Jul, 2015.

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  1. Lincsus

    Lincsus Well-Known Member

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    We have an investment property in my wife's name but the loan is on both mine and my wife's name. We have put some extra money in the loan account. Now I want to redraw that money to buy another investment property (This time, in my name). Will ATO have any problems with that? I know ATO has problems using redraw money for personal expenses. In this case, the redraw money will be used for investment purpose but for a property in my name.
     
    Lincsus, 3rd Jul, 2015
    #1
  2. Jess Peletier

    Jess Peletier Mortgage Broker & Finance Strategy, Aus Wide! Business Member

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    That should be fine - just split the loan to reflect the two different purposes. Interest is only claimable by the person on the title so you want to keep it separate or it will get a bit complicated.
     
    Jess Peletier, 3rd Jul, 2015
    #2
  3. Terry_w

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

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    You will be borrowing money by redrawing so interest generally deductible. Wife and your name on the loan, but the ATO will treat the person on title as the one to claim the deduction. Ideally a new split to avoid a mixed loan.
     
    Terry_w, 3rd Jul, 2015
    #3
  4. Lincsus

    Lincsus Well-Known Member

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    Thank you for your responses.
     
    Lincsus, 6th Jul, 2015
    #4