Small tax question regarding debt recycling to buy shares/ETFs.
Using simple numbers:
Let's say I drew 100k out of my PPOR as an investment loan and purchased 10000 shares worth $10 each.
Now, I have a 100k investment loan, it's tax deductible. A couple of years down the line, those shares have done really well and are now worth $15 each. I now have 100k plus 50k of capital gains.
If I withdrew those 50k profits by selling down 1/3 of my shares, and use that for a new car or something, would that mean 1/3 of my 100k investment loan is now no longer deductible, given I sold shares I bought with an investment loan? Or does the tax man only care that the initial 100k invested is what remains untouched?
Posted Dec 3, 2025, 1:29 AM UTC
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