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Offset account questions

Discussion in 'Finance & Banking' started by caz, 11th Jul, 2007.

  1. caz

    caz New Member

    25th Apr, 2007
    in dream world
    We have set up a loan to use for investments with an offset account against our PPOR ( we have no personal debt, only investment debt). We intend to use some as a deposit for a for IP and may place some in navra and other managed funds.
    My questions are
    1) if the loan in in hubbys name, he earns above average income, I only earn a little investment income say 10k isha year. If we buy managed funds whose name should they be in?
    Can we invest in my name and claim the interest if the loan is in my husbands name ?
    2) we need some cash to go overseas and we are planning on selling some underperforming assets. Can we put this cash in our offset account and draw as needed without changing the interest deductability of the loan ?
    We do not intend to draw out more money then we have put in.

    Thank you
  2. Rob G.

    Rob G. Well-Known Member

    6th Jun, 2007
    Melbourne, VIC
    Hi Caz,

    been waiting to see any replies as there has been a long discussion in the Accounting & Legal section on something similar.

    As I think personally (I could be wrong so this is not advice !!)

    1. The interest deductions should be claimed in the same name(s) as the income declared, this usually being the 'legal' owner of the managed investment.

    It is often more convenient to hold investments in one name - often the lower tax rate person if income positive. Even though both names are on the loan, the individual declaring 100% of the income should claim 100% of the interest deductions where a domestic arrangement exists.

    2. Quarantine the proceeds that will be used for private purposes from the main investment loan account. Co-mingling the money could reduce the deductibility.

    I hope somebody else can vet this info ??