Tax Minimistaion Strategy #8 – Creating tax deductable loans – selling, borrowing and buying again
Tax Minimisation Strategy 8 – Creating tax deductable loans – selling, borrowing and buying again
By selling your shares (or another loan-free investment) and using this to pay off your home loan, then re-borrowing to buy some shares back, this would transfer the amount received on your shares from your home loan to a tax deductible loan. This will allow you to pay off a portion of your home loan (not a tax deduction), create a 100% deductable loan on the buy-back of the shares, so the interest on the share loan can be claimed as a tax deduction to reduce your taxable income, and save you tax.