Debt recycling offers lower taxes, greater investment opportunities
Applied wisely, debt recycling can reduce tax liability and increase investment opportunities.
Debt recycling can make a radical difference to the amount of tax that needs to be paid on borrowings. (Image source: Shutterstock.com)
In the eyes of the Australian Taxation Office (ATO), not all debt is equal.
In Australia, the ATO permit taxpayers to claim a tax deduction for interest incurred on investment-related loans. Interest, however, on private (as opposed to investment-related) loans is not tax deductible.
So, what exactly are considered tax deductible investment loans?
By and large these are loans taken out for the purpose of acquiring income producing assets or in…
