From: Ronald Raygun 
Subject: Re: How to finance my house purchase.
Newsgroups: uk.finance
Date: Thu, 17 Nov 2005 10:38:15 GMT

Tim wrote:

>> > "Doug Ramage" wrote
>> >> By "deeming" it to exist?
>> >
>> "Tim" wrote:
>> > Of course, he could try - but do you *really*
>> > think that he'd be able to "get away with it"? !!
>>
> "Ronald Raygun" wrote
>> He would, but not for long, because the banks would respond
>> by abolishing offset accounts and replacing them with...
> 
> Instead, the banks could keep the offset a/c's and simply say: "You
> actually only have ONE account with us, but when we quote the balance to
> you - for your convenience - we will split the total balance into two (or
> more)
> sub-balances, at your request.  For instance, we may show an account with
> a £80K(D) balance as a 'mortgage' sub-balance of £100K(D) and a 'savings'
> sub-balance of £20K.  You get to choose which transactions are shown on
> which sub-accounts, and thus control the split of the total balance.
> Overall, you have just one account but it "looks" like you have more!!"

But why would you want it to look like more?  Just let it look like a
single overdraft, together with a notified overdraft limit equal to the
original size of your loan.  You can then always pretend for yourself
that the difference between the balance and the limit is your "savings
sub-balance".  By eliminating any explicit reference to a (virtual)
deposit balance, it's easier to demonstrate to the tax people that
there isn't one, and that therefore no taxable interest can be being
paid on it.