If I have a loan in my partner and my name, that is used to buy an income producing asset in my name only, and I am the one declaring the income, am I able to claim 100% of the interest deductions?
I have found this answer however it's from 2019 and I need a more recent confirmation from the ATO please for my accountant. I cannot get through by phone.
Can someone from the ATO please confirm.
Hi @ebnew,
The info on that post from 2019 is still correct. The taxation ruling (TR 93 para. 49) states that 'net profits and losses from the property should be shared in the same proportion as their ownership interests.'
Who actually pays for the loan isn't what matters in this case.
So yep, you certainly can claim 100% of the deductions as the sole owner.
Hi @ebnew,
The info on that post from 2019 is still correct. The taxation ruling (TR 93 para. 49) states that 'net profits and losses from the property should be shared in the same proportion as their ownership interests.'
Who actually pays for the loan isn't what matters in this case.
So yep, you certainly can claim 100% of the deductions as the sole owner.
Thank you so much!
I would like to confirm whether these tax deduction rules also apply to investments in shares.
For example, Mr. X and Ms. Y have a joint loan secured against their owner-occupied residential property, established on 1 July 2024, with the following structure:
If Mr. X uses the $234,000 investment portion of the loan to invest in the stock market on 1 July 2024, can he claim a 100% tax deduction on the interest associated with this investment loan at his marginal tax rate (e.g., 30%)?
Specifically, would Mr. X be able to claim a tax deduction of:
$234,000 × 6% × 30%
for the full financial year ending 30 June 2025, assuming:
Additionally, assuming Mr. X sells all his shares on 31 December 2025 (1.5 years after purchase) and realises a capital gain of $16,000, would the following tax treatment be correct?
Would this calculation be correct, and is Mr. X eligible for the 50% capital gains tax discount after holding the shares for more than one year?
Hi @KTaxPro,
We can’t confirm calculations or give personal tax advice, but we can definitely point you in the right direction.
Yep, if Mr. X borrows money to buy shares and it’s reasonable to expect he’ll earn income (like dividends), then he can usually claim a deduction for the interest on that part of the loan. Even if the loan is split with a private portion (like a home loan). But he can only claim the interest on the investment portion.
Sounds like Mr. X held the shares for more than 12 months before selling. So yes, he may be eligible for the 50% CGT discount, as long as he’s an Australian resident for tax purposes.
If the loan is in joint names, each person can only claim their share of the interest. Usually, 50/50 unless there’s a different ownership split.
Hi Riley,
In this situation do you require any loan agreement to be written between the two borrowers?
My accountant is asking me to prepare this, but the advice seems to be focused only on the title records as being sufficient.
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