Following on from Tax Tips 33 and 34, there are more questions concerning LMI and whether it is deductible or not. Q 1 - What if I increase the loan on my PPOR now, under a separate split, but don't use the money until 2 years later when I take the money to use as deposit on an investment property? Will the LMI on the increase be deductible, and if so when? A - Buggered if I know, but I would say the LMI will probably be deductible in full. There is no clear guideance on when, but I would suspect it could not be deductible until the investment proeprty was acquired and then only deductible over the remaining 5 years since the LMI was incurred. I did find a private binding ruling relating to a similar situation: PBR Authorisation Number: 1011366296645 https://www.ato.gov.au/rba/content/?ffi=/misc/rba/content/1011366296645.htm In this ruling, which is also unclear, it appears the LMI would be deductible - but it doesn’t say when. Q 2 - What if the PPOR is in the name of 2 spouses, a new loan split is established on the PPOR in both names, and then a new investment property is purchased in the wife’s name using the money in the new split. Is LMI claimable and by whom and how much is claimable? A - Again there is no guidance from the ATO that I can find, but I would suspect that the LMI would be deductible to the wife as it relates to her investment property. Q3 - What if the PPOR is in one name and the loan is increased, under a new split also in same name, and LMI is incurred and then the funds as used as a deposit on the new IP which is in both names? I believe the LMI would be deductible to both spouses as the owners of the new investment property. Again there is no authority that I can find to say this is the case. There is a PBR which confirms it won't be deductible against the owner of the PPOR in full though: In PBR Authorisation Number: 1011685701210 https://www.ato.gov.au/rba/content/?ffi=/misc/rba/content/1011685701210.htm which is also not very clear, it appears only part of the LMI will be deductible to the owner of the PPOR as they are only the owner of part of the investment property (shares in this case), but it doesn’t say whether the other spouse can deductible the other portion. Please note that PBRs can only be relied on by the taxpayer that they relate to. But we can use them as a guide of the ATOs reasoning. If you have any of the above situations you may want to apply for your own PBR.