The ATO Wed 9.4.2014, issued Product Ruling PR 2014/7 (Tax consequences for a borrower procuring a new investment loan as part of a mortgage reduction program managed by Allstate Home Loans). Provided the scheme ruled on is entered into and carried out as described in the Product Ruling, the ATO says the anti-avoidance provisions in Pt IVA of the ITAA 1936 will not apply to deny the borrower of a deduction allowed under s 8-1 of the ITAA 1997 for interest incurred under an investment loan procured as part of the scheme. It applies only to the specified class of entities that enter into the scheme from Wed 9.4.2014 until 30 June 2016.
[LTN 68, 9/4/14]