Hello
If an individual tax payer refinances investment property by taking out a new loan (which pays out/off the old loan) I understand one can claim the balance of the borrowing costs on the old loan in the next tax return (this is also noted in a prior question relating to refinancing investment property).
However if the borrowing costs on the old/prior loan were being claimed over 5 years and the individual erroneously omitted to claim the borrowing cost amount in 'one' of the prior years (eg 2021/22 tax year):
(i) Can that amount (that should have been claimed in the 2021/22 tax year) be claimed (as a deduction) when the loan is refinanced as part of the balance of the borrowing costs claimed
OR
(ii) Does the borrowing cost amount not claimed in the prior 2021/22 tax year rather need to be added to the the base cost of the investment property as that amount (relating to the 2021/22 tax year) was not claimed in the year that the amount should have been claimed in (ie the 2021/22 tax year).
I note the 2021/22 tax year which the borrowing costs should have been claimed in cannot be amended.
Thank-you
348 views
4 replies