Splitting LOCs - Interest deductions?

Question. I've read through @Terry_w 's tips but can't find my answer (I might have just missed it though).

If I have a $100k LOC with $50k drawn for non-investing reasons, and I get the bank to split it into LOC A) - fully drawn at $50k
LOC B) - $0 drawn, $50k available

can I use LOC B) for investing and claim 100% of the interest on the drawn amount in LOC B)?

I remember reading somewhere that the ATO considers a LOC to be "refinanced" each month, so I presume that this could work?

 

Yes, depending on the circumstances.

 

Great! Thanks @Terry_w . I thought this might be the case (another benefit of LOC vs Loan w/offset?). I need tax planning advice on some other issues as well, but it's good to have an idea and it means I can possibly start 'shopping' earlier than I planned!

 

Good advice Terry. What was the investment ? Income or capital ? Bad offset ? Credited to a savings account ?

I dont recommend taking posts as client advice Phase 2. There are more issues than you expect in a post to a forum. You didnt expect a definitive answer that you can rely on ? Terrys "depending" answer said it all. Depending what you invest it and how the funds where settled by the bank it could well be non-deductible.

 

That's why I added a 'depending'.

If the loan is a LOC and the borrowings are to invest in income producing shares and there are no detours then the interest will be deductible - assuming no foreign elements!