i had no idea how to word the title of this thread
when applying for my loan for my new IP i refinanced a current IP loan to the tune of $77k ……… the $50k deposit for the new place, $9k legal fees, plus $18k extra for renovations and bank fees.
whatever I ended up not using out of that $18k I was going to pay back onto the loan, and then do a free redraw next year and put that money towards restumping.
for taxation purposes, I know that any money withdrawn from an IP loan can ONLY be spent on investment expenses.
it just so happens that my bill just arrived from my financial planner, am i allowed to use some of that $18,000 to pay his $2,000 fee …. or is that classed as "personal expenditure". he obviously has been giving advice on investing and doing up an investment plan for me. but he has also been looking at my super and savings, which are of a more personal nature.
anyone had experience with this before?
thanks
Interest on borrowings to pay investment expenses should normally be deductible. the fin plan is an investment expense.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
The law is quite painful when it comes to paying for financial planning fees. While the fee itself may not be deductible (the ATO counts some fees as capital in nature if they are going towards the setting up of your financial affairs rather than the ongoing management of them) the interest on funds borrowed to pay those costs should be.
Obviously, check with your accountant or the ATO for further clarification.
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