Margin Loans Margin Loan

Hi

I have a margin loan and it's currently geared to 50% but I do expect the rates to go up in the future and want to minimise my interest payments as much as possible.

With the recent downfall of the share market I had to put extra security in and sold some of the managment funds at a loss to keep my LVR down. (Thank you for those who shed some light into my situation)

I have a chance to borrow $24K and the interest that I pay for that amount will be $720 for two years, effectively paying $360 interest for $24K per year.

What I would like to do is to deposit that amount into my margin loan account reducing the debt level and take that money when I purchase my property.

Would this pollute the deductibility of interest of my margin loan account?

Best Regards

 

TR 2000/2

Basically look at the use that is made of the redrawn money.

If you use it to purchase a rental property then the interest is deductible. If this is your private money then you now have a mixed purpose loan. You are deemed to have paid off part of your investment loan when you (temporarily) deposited the money.

Cheers,

Rob

 

Thanks.

I thought so because I read a similar posting for redraws a few years ago.

Regards
Hiflo