All Topics / Finance / Investment property in husband’s name. Deposit to be used from wife’s offset account. How can interest be claimed on tax??

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  • Profile photo of Eric_SPQREric_SPQR
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    @eric_spqr
    Join Date: 2010
    Post Count: 3
    August 24, 2010 - 11:42 pm

    HI EVERYONE – SOME ADVICE PLZ – Investment property to be purchased in husband's name. 10% deposit to be used from wife's offset account (Husband's name not on this loan). How can interest be claimed on tax?? Is there a way that husband can claim the full amount of interest paid? What have others done in this situation? Thanks..

    Profile photo of blockablocka
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    @blocka
    Join Date: 2010
    Post Count: 38
    August 25, 2010 - 12:01 am

    Not sure of your question but if this is how I understand it …
    Ip in question put 10% in your name and you claim that part and 90% in husbands name and he claims that part…!!!

    Profile photo of WJ HookerWJ Hooker
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    @wj-hooker
    Join Date: 2007
    Post Count: 272
    August 25, 2010 - 12:39 am

    Your 10% deposit is from an offset account – thus the extra interest, on that money is interest you can claim. You can do whatever you like with money in an offset account.
    However the 10% you use for your husbands property cannot be claimed by him, And he cannot now get a loan for that 10% and claim it because it is considered as money paid off so to speak.

    Hope that makes sense ?

    Profile photo of TerrywTerryw
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    @terryw
    Join Date: 2001
    Post Count: 16,213
    August 25, 2010 - 2:28 am

    I agree with WJ

    The offset account is a savings account and withdrawing money from it is not new borrowings so there are no tax issues with taking deposits from it.

    But removing money from an offset will result in higher interest being payable on the loan it is attached to. If your offset is attached to your home loan then you will pay more non-deductible interest.

    A more tax effective way may be to pay down the PPOR loan and then reborrow it as a new separate loan. If the PPOR is in your name only you can on lend to the husband, charging the same interest as you are paying, and he will be able to claim the interest on his tax.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of Eric_SPQREric_SPQR
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    @eric_spqr
    Join Date: 2010
    Post Count: 3
    August 26, 2010 - 7:05 am

    Thanks blocka, WJ & TerryW – comments very much appreciated. Not wishing to refinance & cross-collatarise with a full line of credit against both properties – I think lending the deposit to husband and charging interest seems like an option – thus allowing full tax benefit. Eric

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