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Investment property in wife's name but bank loan in joint names

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Initiate

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Afternoon, Ive had a scan through the old threads but unable to see what Im after. My wife is looking to buy an investment properrty and her name will be on the deed but the bank is saying that the investment loan must be in our joint names.  just wondering how this would impact us at tax time, is she able to claim the full interest expenses as the house is in her name or will in impact as I on the loan? Any thoughts are appreciated?       Cheers Mat

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Taxicorn

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She can claim all of the interest.

 

For related taxpayers, such as husband and wife, the ATO ordinarily treats these situations as not involving such a difference. See paragraph 41 of TR 93-32. There could be circumstances where such a difference can occur for related taxpayers, but merely having a joint loan is not treated by the ATO as falling outside that general rule.  

 

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Best answer

Taxicorn

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She can claim all of the interest.

 

For related taxpayers, such as husband and wife, the ATO ordinarily treats these situations as not involving such a difference. See paragraph 41 of TR 93-32. There could be circumstances where such a difference can occur for related taxpayers, but merely having a joint loan is not treated by the ATO as falling outside that general rule.  

 

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Initiate

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many thanks for your help and the link.  cheers

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Initiate

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Was just about to post this to ask for confirmation but guess theres no neeed. Smiley Happy

 

Having a mortgage in a join names doesn’t necessarily adversely affect the ability for one person to claim 100% of the interest deduction (i.e. the owner of the asset). This is the view espoused by the ATO in tax rulings (TR 93/32) and various private rulings (PBRs **TFN removed**5461, **TFN removed**0439 and **TFN removed**9663).  Therefore, having a joint loan should not create any adverse tax impact. There is one thing you can do to strengthen your position and that is to ensure that repayments come from an account that’s solely in the owner’s name. Using the example above, Karen and Ian have a joint loan for a property owned 100% by Ian. The interest repayments for this loan should come from a bank account that is solely in Ian’s name (this account should also receive the rental income). In this case, we can prove to the ATO that Ian has funded 100% of the interest cost for a loan that was used to purchase an asset that is solely in his name only. Therefore, Ian should be entitled to 100% of the tax deduction.

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Morning,

In regards to yesterday's question about having joint names on a loan but the deed of title for investment property in my wifes name for tax purposes my accountant is claiming that there may be dramas at tax time and my wife may only be able to claim have the expenses. Im finding this very confusing as Ive had it confirmed from a few different sources including the ATO community that this is not the case. Has anyone out there heard of this happening at all, very confused. Smiley Sad

They are pushing me to use their morgage brokers which Im starting to think is the real reason behind this.  Many thanks

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Community Manager

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Hi @matyd1,

 

@macfanboy has provided the relevant legislation that you may be able to provide to your accountant.

 

If your accountant is still hesitant you can contact our early engagement team to get advice.

 

Hope this helps. Thanks, NateH

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Hi @Nate, everything is sorted thx. Actually contacted ATO yesterday to reconfirm my situation. Yes the info posted here was right and I now have a new accountant. Cheers
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Taxicorn

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@matyd1 

 

Glad it was sorted out and that you now have another accountant.