Im looking to take out a single large sub loan equal to my existing mortgage to debt recycle.
In order to redraw this sub loan to DCA I have to pay it down completely with the borrowed proceeds of the loan first then redraw on a monthly basis for the dca.
Does the initial repayment (with the borrowed funds) of the sub loan affect the deductibility of the interest on the redraws moving forward.
Does the initial repayment (with the borrowed funds) of the sub loan affect the deductibility of the interest on the redraws moving forward.
aparently the ATO could trace the purpose of a loan back to what the original borrowed funds were used for. Which would be borrowed and immediately repaid — it wasn’t used for anything income-producing. That taints the loan account moving forward for deductibility of future redraws ??
22 Apr 2024 · 6 min read time
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