Forum Replies Created
- Terryw wrote:How much did you use?
You would have to split the variable into portions – investment portion and non investment portion. But since it is a very small loan any effect would be very small and it may not be worth the effort.
we took out just a bit over 24K which was the 10% deposit.
Terryw wrote:What portion was used for investment purposes and which loan?The variable had the redraw, so we used the money from it.
Terryw wrote:Fixed loan may complicate things.Can you give some rough figures of what the portions used were?
The fixed loan ends in August, so could I wait till then?
the PPOR loans looks like this:
Variable 45K DR (this loan has funds in the redraw account)
Fixed 200K DRTerryw wrote:Ok, mayor quinby here.You have accidently ended up with a mixed purpose loan by combining business with pleasure. But all is not lost because the ATO will allow you to split the loan and recover.
In my eg above you had a $100,000 loan.
You could simply split this up into 2 separate loans of
$10,000 for the investment and
$90,000 for the main residence.Then you can relax and start paying the $90,000 loan down asap and saving non deductible interest while maximising deductions.
Can I add a spanner into the equation. We currently have a split loan of about 25% variable, and 75% fixed. It ends in August this year. Would that mean i will have to wait till it ends?
Also say our loan is now 100% variable on the PPOR. so i split it, meaning I have a three separate loans. one for the IP, a small one for the IP and the remaining PPOR loan?
Is that correct?Terryw wrote:So, what I suggest you do is to split your loan asap. You will then be able to divert more money to paying down non deductible debt and improve your tax position. It will save you thousands over the years.You might even take the opportunity to refinance and get a better rate while improving the structure too.
Hi Quimby, i mean Terry.
Thank you for responding. Can you please explain a bit more what you mean split the loan? I already paid the money out of our redraw and really won't to maximise the deductions and fix anything that was done incorrectly.Would this problem be avoided if we paid the deposit out of the offset account?
