Margin Loans is the interest on a margin loan deductable?

Following on from the Platinum IPO thread, i thought i'd make this seperate so as not to sidetrack it.

... i've just gone through my mail and have received 2 refund cheques. One of them is from my margin loan. I applied for $20,000 worth but got $2,000 so i now have a refund cheque of $18,000.

Where do i deposit the refund cheque of $18,000?

Do i:
1) deposit the cheque back into my margin loan... if so, how do i do this with commsec? Can i deposit over the counter at the local commonwealth branch?

Or,

2) deposit it into my offset account?

Reason i ask is because i'm guessing the interest on the $18k from the margin loan will not be tax deductable if it's deposited into my offset account which i use for both personal and investment use.

 

Simon's reply:

 

One cheque is a refund of a direct debit from a savings account (offset acc) and the other cheque is a refund from my margin loan. My margin loan is also linked to the offset acc.

UPDATE:I just rang commsec and you cannot deposit money direct into a commsec margin loan via a CBA branch.

Apparently there are only 2 ways to deposit funds into a commsec margin loan; either through Bpay or a verbal request over the phone... "hi joe, can you transfer $xxxxx from my linked bank account into the margin loan".

Not sure how the tax office would determine if the interest on my margin loan account is deductable if it has to go via my offset acc in order to be transferred to the margin loan.

Perhaps there is a time limit? Maybe it's only ok to deduct the interest if the margin loan funds are returned within a 7 day period. But if i held these funds in my offset acc for 46 days and then transferred them over, the ATO would say "no mate, you cannot claim, you have to apportion it now".

Does anyone know, or maybe i should ask an accountant?

 

I used my margin loan and they sent the refund direct to the margin loan. I never saw it.

Perhaps you can return the cheque and ask that they instead refund the money to your loan?

 

SGB is at least easier to deal with I have a cheque pay in book that will allow me to go direct payments into my margin account at a BankSA branch. Not much help I know......

Accountant should know if you can do a days turn around in the account and still be fine or not.