Strategy: Using AMP’s Master Facility to Debt Recycle

I thought that the name on the title determined deductibility...so in this case, only the person who owns the shares can claim deductibility...
@Paul@PFI is my understanding correct?

 

You are correct - the name on title determines the deductibility generally, for spouses. The name of the title to the shares, not the property, in this case.

 

In the case of joint ownership, can each spouse deduct only half the interest?

 

generally

 

Are AMP (3.14%pa, various set up fees, $349 annual fee) and Macquarie (3.09%pa, no set up fees, $248 annual fee) still the best options for master limits? Functionality wise which is easier to use? Would prefer a scenario where things could be done with a few clicks instead of having to sign forms with each new split.

 

they are the 2 best out there for debt recycling. Seek some credit advice as to which suits your situation.

 

But AMP require a LOC at a higher rate - but can be $10k in size, and a max of 10 splits.
Mac have unlimited splits I believe. However 10 should be enough for most people.
AMP won't allow IO on a main residence split unless used for investment purposes (at investment rates) Macquarie will if you have a good reason

 

What's a good reason? Minimising my tax bill?

 

lol, don't think that would work

 

Do we need a particular type of loan account for debt recycling? Can't it be achieved with normal redraw facility? I know accounting would be hard but not impossible. I have HSBC "Premier Variable Rate Loan", can I still do debt recycling?

 

any loan that allows redraw it can be done. But there are different degrees of 'done'

 

What happens if the names on the loan used to get funds to buy the shares is in the name of Person X and Person Y, however the shares are only purchased in the name of Person X?

So, only Person X gets the income from the share dividends, however persons X & Y are both on the account being charged interest (for tax purposes)?

 

I have a tax tip on this. Ato consider the name on title determines deductibility of interest where both spouses on loan.

 

Thanks @Terry. So to clarify - the loan is in both names, but only Person X declares the income and claims the interest at tax time (effectively, it's like Person Y has nothing to do with any of it - just exists as a 'name on the loan document')

 

Generally that is the case assuming no trust relationship

 

Not sure I understand... Did you mean, a broker?

 

hi all,
in the process of setting up the amp master limit loan. does anyone know if you can transact from loan accounts?
just trying to understand logistically how to fund investments. typically banks don't allow you to transact from loan accounts. from terry's post it sounds like the suggested way is to fund things from the LOC account and then split into sub-accounts subsequently.