Hi All,
I have my car (5 months old) paid outright. I running out of cash to renovate my investment property. To release some cash I wanted to put my car into a novated lease (salary sacrifice) with my employer. I will be using the car for private purpose.
The novated lease company would be paying me approx $31k cash (buy back) with St George bank. Hence I get the benefit from the novated lease arrangement ..fuel etc. I have taken a 3 years lease for the moment @ 8.25%.
Now I wanted to use the 31k to renovate my existing investment property. Before the renovation I wanted to park the 31k into my line of credit account or Offset account. I will be parking this money for just a month before the reno begins.
Does it make a difference where I park the money in my offset account linked to my PPOR or my Line of credit used for investment purpose only?
Does that mean I can claim the interest of = 31000 * 8.25% per annum as tax deduction.
Regards
IYou will be selling the car and receiving cash. that generally poses no tax issues.
That doesn't mean you can claim the interest on the car. that would be a separate transaction. If you are using it for private reasons then the lease wouldn't be deductible. But if this is a salary sacrifice arrangement you might be reducing your income by the lease amount and saving a bit of tax.
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
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