see TD 2008/27 which basically says capitalised interest retains its character.
http://law.ato.gov.au/atolaw/view.htm?docid=TXD/TD200827/NAT/ATO/00001

Private rulings
PBR 78123
PBR 69725
PBR 93707
PBR 93035

And, generally, TR 2000/2
Income tax: deductibility of interest on moneys drawn down under line of credit facilities and redraw facilities 
http://law.ato.gov.au/atolaw/view.htm?docid=TXR/TR20002/NAT/ATO/00001

This is possible if you set it up correctly. You could even possibly borrow to pay the interest too.

If you use redraw it will not be good for tax reasons as your loan will be part investment and part personal – how would you pay down the personal bit first.

I think your best bet is to set up a separate split, interest only, and use that as 20% deposit and then borrow the rest as another loan.

this sounds like  a  scheme to avoid tax, so the ATO can apply Part IVA of the ITAA 1997 and disallow the deduction.

If you try to keep it commerical, then it may be more likely to get thru. As Dan mentioned, if the loan is unsecured, then it may be commerically justifiale to charge higher rates, possibily similar to what a credit card comapny would charge. This would increase your deductions and move income to the company, capping it at 30%. May work out well if there is a discretionary trust in there somewhere it may work out better too.

You should always try to get that sort of thing in writing.

Was it you that asked in another post about getting access to the phone recordings? Maybe you should lodge a complaint with the bank ombudsman or the credit ombudsman.

The CRAA issue is not that bad as you will not have a declined listed, but just an enquiry. It will be there for 5 years, but it is so bad.

do a search at asic.gov.au to see if it is registered.

Dr house

If you have paid off your home loan i assume you are using the LOC to access equity for investing.

Are you aware of the tax consequences of paying or depositing into the account?

Really it is legal advice, but accountants can advise on legal issues in relation to taxation. If you get written advice then you should be safe.
It might be cheaper if you just lodge a request for a private ruling – or just do it yourself.

Is this company or business australian? If so you could approach the dept of fair trading in your state with a complaint.

You can't dispute the payments with visa, as it really has nothing to do with them You signed up with a business and they are only processing the payments. any dispute you have is with the business.

There may be other legal actions you can take so it may be worth talking to a lawyer.

Danviv

Yes it is possible for one trust to distribute to the other trust, subject to the deed. Who the Trustee is shouldn't matter.