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investment loan - structure

Discussion in 'Accounting, Tax & Legal' started by Sydney888, 26th Oct, 2009.

  1. Sydney888

    Sydney888 New Member

    Joined:
    26th Oct, 2009
    Posts:
    1
    Location:
    Sydney, NSW
    newbie here... :)
    read some of the posts and not sure...

    Trying to determine best way to structure property investment loan.
    Can i do this?
    - Investment Loan under my name
    - Investment unit under wife's name

    Can i claim the loan interest under my name while all income,agent fees goes under my wife's tax return?

    Thanks
     
  2. D&K

    D&K Well-Known Member

    Joined:
    14th Nov, 2005
    Posts:
    206
    Location:
    Canberra
    Claims and income need to be allocated in proportion to ownership.

    Who's name it goes under, or the mix, depends on whether the IP will be positively or negatively geared now and for how long into the future that might be (ie, even if it's negatively geared you may choose to put it more in the lower income earner's name if it likely to be positive in the near term), and particularly if you intend to sell it (to minimise eventual CGT). If you're both likely to be in the same tax bracket, then it doesn't matter so much.

    cheers, Dave
     
  3. Simon Hampel

    Simon Hampel Co-founder Staff Member

    Joined:
    9th Jun, 2005
    Posts:
    4,619
    Location:
    Sydney, Australia
    Just to expand a little on what D&K wrote - it is the purpose of the loan which determines deductibility, not the names on the loan.

    If the purpose of the loan was to purchase a property owned 50/50 by you and your wife, then the interest on the loan is deductible 50/50 between you. Similarly, if the loan was to purchase a property owned 100% by your wife, then only she gets the deduction ... regardless of whose names are on the loan.