Tax implications of temporarily putting money into an IP mortgage account

Hey Dylan, someone on here may correct me on this but I'm pretty sure while the bank charges interest monthly they calculate it daily so just parking the money there for one day doesn't have huge effect like leaving it in there for one month. I have the same issue with offsets and loan names as both our investments are in my name only, I would open another offset in my own name against IP and transfer the majority of the money into it and leave just enough I the other for outgoings ect.. that way you don't need to change all your direct debits.

 

Here is the thing though.....

They allow you to re finance.......

What is a re finance, if not by definition paying out the original loan and then creating another one ?

 

If you were to use the refinanced money for investment purposes or repay a loan used for investment purposes then it would be deductible but if you refinanced and used the money for personal then it would not be deductible

 

Refinancing doesn't change the deductibility of interest.

Its the purpose that counts - borrowing money to acquire an income producing asset. Changing loans doesn't change that fact that you borrowed to buy something.

 

Yeah, I really do totally get that....

So you made a mistake, transferred money to loan instead of another account, maybe it it is worth re financing, if you did it straight away and restored to the same structure as prior, then it would depend how close someone looked at that one statement.

This should also disclose intent, intent prior and after, who in the right mind would do all this if they were trying to pay loan down. Anyway, I know what people are likely to say as the mistake was made and the new money is also tainted now.

I still feel bad for the OP

 

You can claim anything and get away with it until you are audited. You might be lucky and get away with it, but from a tax law pov it wouldn't be acceptable.