If I own an investment property and have a loan with an offset account against it with everything held in my name, and my wife also has the same with the property, loan and offset account held in her name, and we also have a joint account in both names, can we transfer money between the offset accounts and the joint account with no tax implications?
Our salaries are paid into the joint account, and to reduce the debt on the properties we move it into either her offset account or my offset account. There is no interest earnt on the offset account (just a reduction of debt). So say we we have a spare $10,000 in the joint account. Can we move that money into the offset account held purely in my wife's name? And then if our circumstances change later and it makes sense to do so, can we move the money out of my wife's offset account, into the joint account, and then into the offset account against my name?
From a banking perspective, it's all possible and easy. Is this legal from a tax point of view?
Thanks!
Sounds fine from a tax perspective because no cash actually moves in and out of the actual investment loans, which means that any interest incurred on the loans will remain tax-deductible, albeit the interest incurred may be reduced when there is money in the offset account. This is so regardless of whether the spare money gets put into you or your wife's or both of you offset accounts. As long as you don't actually touch the loan accounts, your proposal sounds ok for tax purposes.
Eddie
[email protected]Which bank allows you to have 3 offset accounts against one property (or have I missed something, like having 3 different loans)?
Eddiec, thanks very much, that's what I thought.
IP Freely, sorry if I was unclear. There would be 3 accounts, 2 loans and 2 properties. My wife owns one property, one loan and an offset account, all in her name. I own one property, one loan and an offset account, all in my name. The third account is not an offset account, but it's just a normal account in both names, which allows me to move money from an account in my name to an account in her name, effectively "bouncing" the money off it.
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