We're purchasing a business using funds derived from our PPOR home mortgage (topping up our loan amount) are we able to claim P&I loan repayments as business tax deductions (proportionate solely to the amount borrowed and used for the purchase of the business - not the remainder of our PPOR loan)? The business will most likely operate under a company structure - not sole trader. Thanks
Using your business money and assets for private purposes | Australian Taxation Office
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Repayments of loans made to companies and trusts
If you have lent money to your business, your business cannot claim a deduction for any repayments of principal it makes to you. However, it may be able to claim a deduction for interest it pays to you on the loan. The company or trust should keep records of any loan agreements and documents explaining these payments being made to you.
You do not have to declare the principal repayments, but any interest you receive from your business is assessable income to you and must be included in your individual tax return.
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Using your business money and assets for private purposes | Australian Taxation Office
...
Repayments of loans made to companies and trusts
If you have lent money to your business, your business cannot claim a deduction for any repayments of principal it makes to you. However, it may be able to claim a deduction for interest it pays to you on the loan. The company or trust should keep records of any loan agreements and documents explaining these payments being made to you.
You do not have to declare the principal repayments, but any interest you receive from your business is assessable income to you and must be included in your individual tax return.
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