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AaronSBC(Initiate)Initiate
2 Feb 2022

Hi Everyone,

I have a client borrowed money to purchase units in the trust which then purchased a property. The unit trust is run separately by a financial planner. In previous years there was a trust distribution from rental income and we claimed interest on the loan in the clients tax return. In the 2021 year there was no distribution as the income was down due to COVID. The trust made a loss.

Previously the interest was claimed at label 13 as a deduction against the trust but with no distribution that causes an error. I think the interest is still deductible as I believe the trust will return to having distributions in the near future.

But what label is best to include it at?

2,115 views
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2,115 views
1 replies

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Most helpful reply

RichATO(Community Support)Community Support
5 Feb 2022

Hi @AaronSBC


You are correct in saying that that the interest is deductible if there is reason to believe the property unit trust will produce assessable income in the future.

This is allowable under ITA 1997: Section 8.1

For the current year that there has been no assessable income for investors your client can record the interest expense at item D15 in the supplementary section.



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Most helpful reply

RichATO(Community Support)Community Support
5 Feb 2022

Hi @AaronSBC


You are correct in saying that that the interest is deductible if there is reason to believe the property unit trust will produce assessable income in the future.

This is allowable under ITA 1997: Section 8.1

For the current year that there has been no assessable income for investors your client can record the interest expense at item D15 in the supplementary section.



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Can interest be claimed on loan for units in unit trust if no distribution this year | ATO Community