Structuring PPOR to become IP

Hi,

I have been reading threads about this & googling a fair bit on the subject.

My PPR is LOC 323K LOC with balance of say 312K leaving 11K excess available. I called westpac to ask questions regarding changing to I.O rocket repay loan with offset ( & it has redraw).

I assumed I could take the excess funds 11K- & drop them into the offset a/c leaving the I.O loan balance at 312K.

It was explained that that is not how it works. What happens is that the whole 323K LOC loan changes to I.O rocket repay with offset but the 11K stays in redraw.

From what I understand that would confuse things tax wise ,(once it becomes IP)if I was to redraw the 11K & put in the offset a/c then use for personal expenses (which I will need it for)

Im thinking a way around it could be to draw the 11K out now & "put it in my pocket"

Then set up the rocket repay loan owing 323K, then once set up put the 11K into the offset.

Then I only have interest payments to make & the loan will stay at 323K for when it becomes an IP. No confusion for the taxman.

Does the above scenario sound like the right way to do it?

I have an advantage package, so no fees for changing the loan & .25% discount.