Usage of offset funds against deductible loan?

Quick question... I just want to check that I'm not creating an issue for myself here.

Account Split #1 is $250k, fully deductible debt against PPOR (Split has been fully paid down then redrawn for investment expenses). I then put $250k into the offset account against it, but now need to start using some of this cash.

Can I use the cash in the offset account for non-deductible expenses?

 

You can use the cash for anything you want. But are you saying you borrowed to put money into the offset account? If you use it you will incur interest and this won't be deductible.

 

No, I put $250k savings into the offset Terry

 

in that case there would be no issues, even if the loan relates to an investment use.

Tax Tip 82: Taking money from an offset account on an IP and Claiming Interest Tax Tip 82: Taking money from an offset account on an IP and Claiming Interest

 

Thanks Terry, very helpful.