Strategy change advise - utilize 2 tax free threshold

Thanks Terry, so initial investment 200K and approx 10K divi 1st year and 12K second year followed by 15k and 20K for Y3 and 4 respectively and market had a bull run that initial investment became double in 4 years so an individual will have 400K+57K=457K if sold and will pur the money into PPOR to drop the loan from 657K to 200K ?

But that particular year that individual needs to pay CGT on the 50% of the earnings? However the IR will need to be adjusted (claimed) for initial 200K-Am I correct?

 

Not sure what you mean, especially, by the last sentance.

Income is taxed, but the income will be offset by interest payable. If shares are sold CGT will be payable on any capital gains, but a 50% CGT discount can apply.

 

Got it-so is it worth to have IO loan for investment money or P+I is acceptable too?

 

PI might be worth it too. Depends

 

I have gone through your thread about "
Strategy: Using AMP’s Master Facility to Debt Recycle"

The only thing I am unable to understand is LOC why is it crucial (otherthan AMPs mandatory condition to charge higher interest).

E.g. loan from any bank lets say St George or any abc bank and at the time of loan we split it as per below:-

Split A 500K P+I with Offset + Redraw
Split B 250K P+I (with or without Offset irrelevent)
Split C 20K (as split B)
Split D 30K (as above)

Now overall we be paying less IR as mo LOC and all the money be going into Split A's offset and once 30K is ready pay it into Split D and redraw to invest in Share market repeat the same for others.

Do you see any issues with above?

 

LOC isn't crucial.

I can't comment if your proposal and I don't understand what you plan to do. Get some specific tax advice.