Using redraw for an loan investment

Hello, I have about $220k available on a redraw account for a PPOR P&I loan

Currently the variable / redraw portion is 2.44% (I have $600k fixed at 1.99%)

I could make an unsecured loan to a company I know very well and get an 8% interest rate (I understand the risks of this).

However, my marginal tax rate is 47c/$ (inc medicare) + some other unknown contribution for child support increase. For the sake of argument, let's say my marginal tax rate is 50c/$

So if I made a 150k investment, the return isn't really worth it unless the 2.44% is tax deductlible.

(If tax deductible, return after tax is about $4.2k p.a. If not tax deductible the return is $2.3k p.a.)

Would it be unwise (or even possible) to try to get a tax deduction on the 2.44% from the PPOR home loan for the investment loan? Would there be an issue with CGT on the PPOR?

Admittedly the risk/reward for the tax deductible case isn't the best either.

 

Unless you are doing someone a massive favour, why risk $150,000 for (best case) $4,200?

2.8% net return for an unsecured investment... nope.

 

You would be silly if you didn't.

none as security for a loan doesn't affect CGT.

Tax Tip 67: Using Redraw Facilities on loans and Tax Issues Tax Tip 67: Using Redraw Facilities on loans and Tax Issues