reducing Home loan Debt with Investment income

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AndrewDjapouras
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@andrewdjapouras
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Post Count: 9
October 5, 2006 - 10:19 am
[biggrin]
I have heard there has been a recent Tax ruling not sure of the TR number, but it seems
as long as you have equity in your investment loan, you can continue to accrue interest repayments, while using the income from your investment property to reduce you home loan.
Can anyone confirm.
Warm regards
Andrew
Terryw
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@terryw
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Post Count: 16,213
October 8, 2006 - 4:06 pm
I haven’t heard of a tax ruling, but have heard that some idividuals have received private rulings relating to paying interest with interest. Check the somersoft forum and the invested.com.au forums.
Terryw
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noddies
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@noddies
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Post Count: 151
October 9, 2006 - 3:25 am
Hi.[biggrin]
When converting equity to cash to be used for investment purposes, it is better to use a split loan.
for example,
LOC no 1 is used for personal use and LOC no 2 is used for investments
This keeps the accounting side separate and defined and is less confusing for your accountant and the ATO.
Note: If you are investing in markets that produce cash flow,then this is subject to CGT on the earnings (not on income).
Any income received by LOC 1 (personal) when transferred from LOC 2 (Investment) is subject to income tax.
The Income tax may be offset if using a negative geared investment.
I think.
General advice disclaimer etc.
Financial planners can only give tax advice in conjunction with a financial plan.Please seek the services of an accountant for further clarification.
Regards
Bryce Inglis
AR282821
Investment & Implimentation manager
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Mortgage Hunter
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@mortgage-hunter
Join Date: 2003
Post Count: 3,781
October 9, 2006 - 6:08 am
Originally posted by ADJAPOUR29220:
[biggrin]
I have heard there has been a recent Tax ruling not sure of the TR number, but it seems
as long as you have equity in your investment loan, you can continue to accrue interest repayments, while using the income from your investment property to reduce you home loan.
Can anyone confirm.
Warm regards
Andrew
Many of us would love to see such a ruling.
I haven’t heard of one and I keep my ear pretty close to the ground. Can you track down where you heard it and get some more info?
Ta
Simon Macks
Residential and Commercial Finance Broker
***NODOC @ 7.15% to 70% LVR***
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0425 228 985
Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.