All Topics / Legal & Accounting / Interest Capitalisation

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  • Profile photo of Insan3Insan3
    Member
    @insan3
    Join Date: 2006
    Post Count: 10
    August 18, 2006 - 9:36 am

    I am looking at purchasing an investment, and obtaining a Line of credit and allowing the interest to accumulate for a few years and dunp all incomes into my PPOR loan.

    Is this OK to do, assuming I claim only the interest charged on the initial amount required for the purchase?

    I am looking at borrowing 175 to purchase a 130k unit then capiltalise the interest to 175, then make lump sums to remove it. Can an accountant backtrack and ensure I only claim on the initial 130, and would you recommend doing it iin this manner??

    Thanks all!
    Matthew

    Profile photo of TerrywTerryw
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    @terryw
    Join Date: 2001
    Post Count: 16,213
    August 20, 2006 - 1:20 pm

    Sounds messy and could be costly if you want the accountant to work out the interest you wish to claim. Why do you want to do it like this?

    Terryw
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