Hi,
I'm looking for some advice on an accounting matter that maybe someone else here has experienced before.
I put a 10% holding deposit on a property using cash out of my personal bank account.
I was under the impression that when the property was due to settle, my deposit would be refunded.
In fact, the vendor is now simply asking for the 90% balance and claims it is very difficult to refund the deposit.My question…would it be possible to 'repay myself' (my personal cash account) using equity in an investment property loan in order for the deposit amount to be loaned and the interest tax deductable?
Thanks for any kind words of advice you might have.
No, you cannot repay yourself. I forget the name now, but there is a tax principle that you cannot borrow from yourself.
You should have borrowed the money from someone else temporarily. This is why it is a good idea to set up a trust to hold your cash so that you can borrow from the trust for situations like this.
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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