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Can I borrow my son money to offset my investment loan interest

Newbie

Views 109

Replies 1

Dear Sir or Madam,

My son intends to purchase the property but property is so hot and he decided not to buy now and wait for a year.

He has suplus $100K cash at bank.

I have investment property and borrowed bank $100K at rate 3.24%. It is offset account.

The question is can I borrow my son money $100K to put my offset account? If doing so, I will not pay bank interest but will pay my son interests. My son will claim the interest received from me as interest income. The loan agreement between myself and my son will be done by a solicitor.

From tax perspective, whether is it acceptable by ATO?

Thank you for your answer.

 

 

 

 

 

1 ACCEPTED SOLUTION

Accepted Solutions

Most helpful response

ATO Certified Response

Community Moderator

Replies 0

Hi @mikeli 

 

There may be an issue with paying money into the offset account and then withdrawing it. When you withdraw it you may not be able to claim the interest you pay as a deduction.  If it is all set up correctly it may be possible. Please contact our Early engagement team who will be able to assist you with more specific information..

1 REPLY 1

Most helpful response

ATO Certified Response

Community Moderator

Replies 0

Hi @mikeli 

 

There may be an issue with paying money into the offset account and then withdrawing it. When you withdraw it you may not be able to claim the interest you pay as a deduction.  If it is all set up correctly it may be possible. Please contact our Early engagement team who will be able to assist you with more specific information..