My father-in-law is a non-resident of Australia and recently received AUD $9,000 in interest income from a loan he provided to a relative for investment in shares/ETFs and generating assessable income.
Our questions are:
1, Does my father-in-law need to apply for a Tax File Number (TFN) and lodge a tax return to report this interest income? And I also checked the ATO website (https://www.ato.gov.au/forms-and-instructions/payg-withholding-from-interest-dividend-and-royalty-payments-to-non-residents-annual-report) states: "This amount will not be included in your taxable income. We will advise you of the amount of withholding tax you have to pay on this interest." Does this imply the interest is not considered taxable income in Australia, and the ATO will initiate contact to determine the withholding tax amount?
2, Can the relative who borrowed the money deduct the interest($9,000) they paid to my father-in-law on their tax return, similar to deducting interest paid on a loan for investment from a bank?
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