Hello Folks, I am looking at setting up below structure: Current: PPOR loan (variable) - 525k - Have redrawn 75k and used it for IP deposit - Looking to redraw further in future for upcoming purchases New split: Fixed1 - 75k (should be tax deductible I guess) Fixed2 - 75k (possible future tax deductible after redraw from variable part) Fixed3 - 100k (possible future tax deductible after redraw from variable part) Fixed4 - 200k (possible future tax deductible after redraw from variable part) Variable - 75k (will redraw in coming months for other IP purchases and related expenses) Can I split in advance and claim deductions on the fixed part in the future after my redraw crosses that fixed part amount? Thanks, Antony
only the interest part could potentially be deductible, but you don't give much info to determine whether it is. It looks like you might have a mixed loan. If you fix before using how could the loan relate to an investment use?
Sorry, here is some info which might help: I am only using the redraws for IP deposits and related expenses, this is to make my PPOR split loans tax deductive. As of now, only Fixed1 part of my split is tax deductive because I have already redrawn 75k of my PPOR loan for IP purposes earlier in 2021. Consider the below scenario: 2022: I move my 75k savings to the offset account, then redraw 75k for IP purposes. Can I tax deduct my Fixed2 part of 75k? 2023: I move another 75k savings to offset, then redraw 75k for IP purposes. I move another 25k savings to offset, then redraw 25k for IP purposes. Can I tax deduct my Fixed3 part of 100k? Because my variable part is only 75k, I am trying to redraw multiple times from the variable part and make the fixed part of the loans tax deductible after redraw. Thanks, Antony
In simple terms, my question is Considering that all the splits are my PPOR loans, if I redraw 75k from my variable loan, can I tax deduct the 75k fixed loan instead of the variable loan? Thanks, Antony
The key issue is the ability to determine what each loan split was originally or newly used for. You can intend to use borrowed funds and completely mess up deductibility by passing the funds through other accounts or blending with other money. Have you ever asked for bartender to remove the gin from a martini (or bourbon from a b& coke) as its too strong ? You can only dilute it. Or not drink it. Blended or compromised loans are much the same.