If I recycle my PPOR debt to invest in bonds or a fixed-income fund like Blossom App [Removed by moderator], does the interest then become deductible? I'm aware that the asset must be income-producing in some way, but I'm unsure if returns on asset such as bonds count as income since there doesn't seem to be a dividend paid from funds like blossom.
Hi @mang0e,
You're right, the interest can only be claimed on income producing investments.
If the dividends are re-invested you need to report the income and you can then claim the interest.
Hi @mang0e,
You're right, the interest can only be claimed on income producing investments.
If the dividends are re-invested you need to report the income and you can then claim the interest.
Revisiting this question are term deposit or debt funds considered income-producing investments? They may not have high and variable (risky) returns but at the end of the day they do generate income in terms of interest paid out.
Hi @Govoz
Income producing assets are assets that produce income so yep those examples sound like they fit that category
If you're wanting to know about claiming interest like the original poster asked, that depends. You claim deductions against the income those assets produce so in that context even though your assets may be considered 'income producing' we'd need to work out if or when you can claim expenses against the income they produce. e.g. for an investment property - interest can't be claimed immediately unless it's rented or available for rent.
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