Hi,
I agree with you Alistair, only an accountant can give the advise on tax matters. Just my observations.
Sharlene
[email protected]Here are two private binding rulings from the ATO on the capitalisation of interest:
Private Ruling 69725
http://www.ato.gov.au/rba/content.asp?doc=/rba/content/69725.htm
Private Ruling 63384
http://www.ato.gov.au/rba/content.asp?doc=/rba/content/63384.htm
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
Pellowe wrote:My understanding is this has been thoroughly tested, and although I can't quote quote anything, the guideline is you can't claim interest on interest, only on the original cost.I believe there's no problem with it happening in a Margin Loan as well?
If i was to use Capitalising Interest for Investing Purposes ONLY by a LOC I'd definetly speak to a professional
Wow wasn't that fun
but where are the accountants with opions on this too.Again I'm not an accountant, but the good ones seem to advise against claiming interest on capitalised interest. I don't think capitalising it's bad – quite the contrary. But to keep my nose clean and beyond reproach, I wouldn't claim it. The ATO seeks and destroys schemes designed to avoid tax, so if that is the goal, forget about it; but as my wise peers have already suggested, if it's a necessary means to a different end, get individual advice from an accountant, and even seek a private ruling for yourself!
look up private binding ruling 69725 on the ato website it might help you
glenn
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