ATO Proportioning of Interests Deductions, page-4

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    I have a serious expectation that if your partner borrows the money but the shares purchased with that money are in your name, the ato will not allow you a deduction for the interest expense. You would need a loan agreement on commercial terms between you (as borrower) and your partner.  Any interest you pay your partner would be deductible to you but declarable income to your partner who could then claim the interest on the loan from the bank.
 
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