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Re: Husband and wife Interest claiming, joint loan split but individual investment portfolios

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Newbie

Views 745

Replies 11

Hi guys,

I need some advice to make sure investment loan setup will allow myself and wife to claim 100% interest on split loans and ATO will be happy with.


*We are experienced share traders who are looking to setup long term portfolios. We have had margin loans previously but looking at using our equity to get better interest rates.

 

*Wife cannot get a individual loan in her name at the moment due to having our child and not working and won’t be for a while

 

*We have just setup a joint 400k interest only equity loan.

 

*Our bank has offered to split the loan 100k to 300k

 

*The bank told us we can name the splits , eg 100k Split would be called “my name investment loan” And 300k split would be called “Wife’s name investment loan”

 

*Individual portfolio cost would match exact split e.g “wife’s name” split would cost exactly 300k

 

*Loan repayments would come from each individuals bank accounts e.g wife’s individual bank account would pay split called “wife’s name investment loan”

Any dividends will be paid to individuals bank accounts in the same way.

 

*I would like my portfolio to be about capital growth and not income/dividends as I would like to reduce my taxable income a bit using the loan repayments to do that. And not paying down my split of the loan only interest

 

*My wife on the other hand would be the opposite, she would be paying her split down as fast as possible and trying to get a more income type portfolio.

 

*Is it possible to setup our portfolios in this way, allowing us to claim 100% of the interest of each person’s split.???  Keeping in mind the loan documents when originally applying was a joint loan.

 

*Any advice would be great appreciated.

 

Regards

Breck

1 ACCEPTED SOLUTION

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Best answer

Devotee Registered Tax Practitioner

Replies 3

You should have separate loan accounts in separate names.

 

Whether loans are paid down quickly or not should be determined by the terms of each loan.

 

11 REPLIES 11
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Best answer

Devotee Registered Tax Practitioner

Replies 3

You should have separate loan accounts in separate names.

 

Whether loans are paid down quickly or not should be determined by the terms of each loan.

 

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Newbie

Replies 2


@Bruce4Tax wrote:

You should have separate loan accounts in separate names.


Hi Bruce, thanks for your reply. Unfortunately my wife cannot get an individual loan at the moment due to being a full time mum to our baby daughter. I have now received advice from a number of tax professionals. Some say having a dedicated split for sole purpose of investing should be totally acceptable and some say it needs tweaking?


@Bruce4Tax wrote:

Whether loans are paid down quickly or not should be determined by the terms of each loan.

 
loan is allowed to be paid down as much as required 


 


 

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Devotee Registered Tax Practitioner

Replies 1

my wife cannot get an individual loan at the moment due to being a full time mum to our baby daughter.

 

If you can get a loan, then so can she if you guarantee it.

 

If the lender will not do that, then you are at the wrong bank.

 

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Newbie

Replies 0


@Bruce4Tax wrote:

my wife cannot get an individual loan at the moment due to being a full time mum to our baby daughter.

 

If you can get a loan, then so can she if you guarantee it.

 

If the lender will not do that, then you are at the wrong bank.

 

Thank you again Bruce for your reply. I will definitely enquire about that.

 

This I found today goes into similar setup but with property, the difference here is I would also like to split the loan so myself can buy a dedicated investment.

 

they are particularly quoting "See paragraph 41 of TR 93-32"

 

here is the full question link

 

https://community.ato.gov.au/t5/Investment-property/Investment-property-in-wife-s-name-but-bank-loan...

 


 

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Newbie

Replies 3

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Devotee Registered Tax Practitioner

Replies 2

You should read the examples after para 41.

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Newbie

Replies 0


@Bruce4Tax wrote:

You should read the examples after para 41.


Ok thanks I will. Sorry about the reply's , obviously you can tell it's first time on here😂

Newbie

Replies 0


@Bruce4Tax wrote:

You should read the examples after para 41.

 

Hi Bruce I'm a little lost with the examples. Every example they mention involve some kind of joint ownership of the property/investment  to some degree.

My wife and I have Individual broking accounts which would make the Investment  purchased fully individually owned? Would it not?

 

kind regards,

Breck

 

 


 

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Taxicorn

Replies 0

@Breck 

 

I beleive that you could under TR 93/32 paragraphs 38 & 41 but I would be requesting a private ruling on this matter to support it.