Thank you for your response. I really appreciate it.
Regarding Option 1, I had a follow-up question - My lender requires that any redraw funds are first deposited into the offset account before being transferred to a brokerage account. Would this affect the ability to trace the use of funds for tax purposes?
Do you happen to know if this could present any issues?
Thanks in advance.
Hi @rummage_au,
You need to be able to able to clearly trace how the redrawn funds are used. To claim an interest deduction, you need to show a clear link between the borrowed money and the investment it was used for.
It's important to keep:
Offset accounts often have multiple transactions, so mixing investment funds with personal money can make tracing more difficult. We've responded to recent post that goes into this in more detail.
Because these arrangements can get complex, we can't give a definite yes or no. It might be worth speaking with a registered tax agent. They can review your specific arrangement and lender requirements.
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