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Mimiskies(Newbie)Newbie
27 Feb 2025

I want to split my mortgage to debt recycle. As a sole trader, am I able to use the funds I debt recycle/withdraw from the deductible side for anything business related such as:

Cost of goods sold,

Paying distributors,

Business rent,

Paying ATO for BAS, employee guarantee super & income tax,

Business bills such as electricity


Are any of these business expenses not considered an ‘income generating asset’? In terms of debt recycling?


And if the mortgage is a joint account with my partner but I am a sole trader, am I able to claim 100% of the interest of the deductible split loan that is all used for business or only 50%?



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1 replies
370 views
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Most helpful reply

BrookeATO(Community Support)Community Support
17 Mar 2025

Hi @Mimiskies


Debt recycling can get quite complex pretty quickly.


In terms of what you can and can't claim when you withdraw from your mortgage, it's more about how it contributes to your assessable income. For example, if you withdrew from your mortgage to invest in shares, you'd then be able to claim the interest.


We'd suggest getting tailored technical assistance for your scenario, they'll be able to consider all factors specific to your situation.

All replies

Most helpful reply

BrookeATO(Community Support)Community Support
17 Mar 2025

Hi @Mimiskies


Debt recycling can get quite complex pretty quickly.


In terms of what you can and can't claim when you withdraw from your mortgage, it's more about how it contributes to your assessable income. For example, if you withdrew from your mortgage to invest in shares, you'd then be able to claim the interest.


We'd suggest getting tailored technical assistance for your scenario, they'll be able to consider all factors specific to your situation.

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What can I use Debt recycling on as a sole trader? | ATO Community