Tax Tip 14: Never ‘Park’ money in a loan

Pre-ordering to get the very first copy. Don't forget to sign it Thanks!

 

I think I need some pushing to get it done so please keep reminding me.

 

@Terry_w I have a suggestion, put a coming soon book launch page on the internet with a sign up box for preorders with discount offer and/or autograph and start collecting email addresses. When you are ready to sell, you will already have all these buyers lined up and you will get instant sales. It will also lock in your commitment once you know there are all these people waiting for the release.

 

Funny, this morning, I instructed my assistant to make a simple website doing just that. I acquired the domain name ages ago for this and for a few others.

 

Sell at a discount ?...You mean we have to pay for it.

 

Will the crayon drawings smudge ?

 

Too many people to reply to, thanks for all of your great advice

 

Let us know the link when ready.

 

I will report back soon.

 

If your money is "parked" in your PPOR loan but then that property becomes an IP, are you "safe" if you take the excess money out before it ceases to be your PPOR?

 

Nope.

Tax Tip 77: Redrawing Extra Repayments to Increase Deductions? https://propertychat.com.au/communi...extra-repayments-to-increase-deductions.5760/

 

Ok, so considering some banks advise that having a redraw facility is the same as offset, what if those funds are parked in a loan that has redraw? They will show as available funds.

 

Lol, many bank staff do say that. But a redraw is completely different to offset. Paying money into a loan is paying it off and taking money out is new borrowings - even if from redraw.

Not the same with an offset account as nothing is paid into the loan.

 

The new redraw borrowing would have to pass a new test for its use. eg a new investment = yes... against the income from that new investment. Its always recommended that new loans are split from old money so each purpose is distinct. Redraws can blend loans and leave a complete mess that loses its nexus to the original purpose so the ATO give up, deny deductions and leave you to prove them wrong.

 

This is interesting to know. I recently closed the mortgage account on my PPOR, which had both offset and redraw facilities. There was no minimum redraw and I didn’t realise it made a difference, so I used the offset and mortgage accounts interchangeably for paying bills by bank transfer. Does this mean my credit rating record will show me as having taken out dozens of tiny new loans over the years?

 

nope

 

So when you get equity release money do you need a brand new savings account to park the money (while you decide where to put it) and instead of putting it in the ppor offset.

 

see this one
Tax Tip 1: Parking borrowed money in an offset account Tax Tip 1: Parking borrowed money in an offset account

 

@Terry_w I look forward to purchasing a copy when its ready.

 

my heading for this threat could have been worded better

see this related post
Tax Tip 414: Parking Someone Else’s Money in your Loan Tax Tip 414: Parking Someone Else’s Money in your Loan