Depends on the bank.Last week I asked one of the majors this exact question. They said it would be ok if going through a financial planner, but no if going and investing yourself! The trouble is fin planners would charge a fee to go through them.

99% don';t understand. But the good thing is you will be right for the next one.

Make sure you seek legal advice. I would get a loan agreement drawn up and a second mortgage maybe – to protect your interests if your mum is sued.

Why is it unfair?If I borrowed $10,000  to use for a holiday it wouldn't be deductible. Its the same thing.There was a way around it – you could have not paid money into the loan. You could have had an IO loan with a 100% offset and saved the same amount of interest. But you just didn't understand at the time. Most people don't. You will be right…[Read more]

I am not sure what you are getting at.You will have 2 loans still, one for $792,000 and one for $250.000. If the first is an investment the interest on this should be deductible. same for the second.Or are you saying you will combine both loans into one $792k loan?This wouldn't make any difference, the only deductible part would be the $250k…[Read more]

Speed is important. It may be wise to try to have LOCs set up before the client eve starts looking.

If you get audited the ATO usually send out a letter first asking what the balances of loans are and if any money has been redrawn from the loan etc.The chances of getting audited as pretty slim, but it is still possible. The tax law says you cannot do what you want to do and claim a deduction. Whether you want to or should do it properly is a…[Read more]

eg. You have a $100,000 property with a $20,000 loanYou buy IP 2 for $100,000 and borrow $110,000 using IP 1 and IP 2 as security.Bank has $200,000 loan to secure a debt of $130,000.If something goes wrong and repayments are not being met the bank can sell IP 1 or IP 2 or bothIf you structured it differently you can still get the same result.Loan…[Read more]

Why?What are you withdrawing the funds for? You must look at the purpose the funds are borrowed for.If you withdraw funds to deposit into a savings account and then use to pay down your new loan, then the interest wouldn't be deductible.If you withdraw funds to make a new carport on that property and that property later becomes an investment then…[Read more]

Hi BankerAll valid points. But what about the major downsides of CC?such as1) bank may have more security than needed2) bank may have a choice on which property to repossess3) bank may not release security for a sale if remaining security is not enough4) harder to untangle when more properties come along5) harder to refinance into another lender…[Read more]

and http://www.ato.gov.au/corporate/content.asp?doc=/content/00137188.htm

This is called cloning or trust splitting.It used to be possible, but then the ATO abolished the general CGT exemption. Though it may still be possible in some circumstances.see TR 2006/4http://law.ato.gov.au/atolaw/view.htm?docid=TXR/TR20064/NAT/ATO/00001And http://www.ato.gov.au/taxprofessionals/content.asp?doc=/Content/00109677.htm

I was a bit out with my top rate!So you need to earn $180,000 pa plus before you are on the top marginal rate.

Westpac and ING used to. up to about 85%.

duckster wrote:
You must purchase shares that pay a dividend to be able to claim interest expenses as a tax deduction against income derived from the shares .

I beleive If you buy shares without a dividend the interest on funds borrowed to buy these shares should be deductible against the person's other income. As long as you are planning on…[Read more]

RudiYou would have to talk to a bank over there. Australian banks wouldn't be able to take it as security – except maybe aussie banks operating in the UK

hi PhilA few more things to consider:- possibly no CGT as the place is the parents PPOR.- You can't just refinance their loan into your name. You will have to apply for the loan separately and qualify. You can have the same amount though and it will be a family transfer – banks will understand.- You need to consider the bankruptcy act. eg any…[Read more]

try bankwest

Redraw = borrowing.If you redraw now the extra interest on this portion of the loan will only be deductible if the purpose for which the money was used is investment/business.

I don't beleive there is any benefit in cross collateralising and many problems with it. Of course there are plenty of benefits to the bank – they can get more security than they need and tie the client up further making it harder to leave.The only possible time I would suggest it is if there are a few properties each with a little bit of equity.…[Read more]