Tax Tip 46: Want to Pay IO on a PI loan?

Discussion in 'Accounting & Tax' started by Terry_w, 3rd Oct, 2015.

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  1. PeterW

    PeterW Well-Known Member

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    Ok thanks Terry, makes sense. However to really get this strategy humming, it would be good to have it automated, rather than do manual transfers of the interest amount. Especially if doing this across a number of loans.

    And to the previous points about why do this/is this the best use of funds. Sure, for me it is. I have plenty of unused loan funds and nothing to spend them on (or probably more accurately, given my current portfolio, it doesn't work for me to go and put 100% of these extra funds into a new IP/shares). Good idea Terry!
     
    PeterW, 8th Dec, 2019
    #61
    Terry_w and Beano like this.
  2. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    A refinance means a reduction to one loan with a offsetting increase to another. A zero sum game. If anything occurs that produces a tax benefit eg capitalising amounts then Part IVA may apply. It may be complex and difficult to demonstrate the deductible % over time. Borrowing to pay the capital component seems a potential Part IVA issue for capitalising borrowings and a ruling would be suggested
     
    Paul@PAS, 9th Dec, 2019
    #62
  3. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Has anyone attempted this strategy yet?
     
    Terry_w, 9th Aug, 2021
    #63
  4. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Terry_w, 4th Jul, 2023
    #64
  5. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    I have covered this topic in Episode 95 of my podcast " Paying Interest Only on a Principal and Interest Loan"
     
    Terry_w, 5th Jul, 2023
    #65
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  6. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Terry_w, 2nd Mar, 2024
    #66
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