can i claim the interest on a redraw facility when invested in Australian dividend paying shares
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Best to see a financial advisor
Deductibility of a loan depends on the purpose of the loan. Offset account is not the loan. if the only action is using money in the offset account that does not change the loan. The source of the money would need to directly come from the loan and purpose of that money would determine the deductibility
ATO has set it out in TR 2000/2 https://www.ato.gov.au/law/view/document?docid=TXR/TR20002/NAT/ATO/00001
It depends whether you are meaning redrawing from an existing loan as the text of your post says, or withdrawing from an offset account as the heading of your post says.
1) Simply taking money out of a mortgage offset account does not constitute new borrowings and therefore any extra interest on your home loan is not deductible as the purpose of the original borrowings was to buy your home.
2) However, if you have paid your home loan down in advance and the bank allows you to redraw funds from that loan account, then that constitutes new borrowings and the purpose of that withdrawl will determine whether it is tax deductible or not. If used to buy shares, then yes, the extra interest would be deductible.
Hi @mickwhipps01,
Just jumping on to share a post we've recently applied to - the info should help you with your question.
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