What type of investment expenses qualify for a deduction?
– A taxpayer?
At a glance:
– Deductions may be available for expenses incurred in producing assessable interest, dividend or other investment income.
– Ensure the expenses claimed are for income-producing purposes.
– Contact us if you require any clarification or advice.
Investment expenses incurred in producing assessable income may be deductible if incurred for:
- Account-keeping fees where the account is held for investment purposes (such as a cash management account);
- Interest charged on money borrowed to purchase shares and other related investments; and
- Ongoing management fees or retainers and amounts paid for advice relating to a change in investment mix.
If the interest expense is attributable to capital protection under a capital protected borrowing, it is not deductible and is treated as a payment for a put option.
Other expenses incurred in managing a taxpayer’s investments may also be deductible, including:
- Travel expenses;
- The cost of specialist investment journals and subscriptions;
- Borrowing costs;
- Internet expenses; and
- Depreciation of a computer.
Deductions may not be available for certain expenses, such as fees charged for drawing up an investment plan unless the taxpayer is carrying on an investment business.
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– Interest expenses must be apportioned between private and income-producing activities.