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TaxquestionsAus(Initiate)Initiate
3 Apr 2025

I run a sole proprietorship and pay both business expenses and personal expenses with one credit card. Each year the relative proportions change.


In the past income year I received a credit card repayment protection insurance payout for this credit card that is quite substantial. I understand this is reportable income.


What is the appropriate way to allocate this income between what is personal or business e.g Should it be 50/50 as you might do when you split interest income for a joint bank account, or should I estimate how much of the credit card expenditure belongs to the the business (the debt which the insurance is repaying/covering goes back many years)?


Thank you

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3 replies
183 views
3 replies

All replies

RachelATO(Community Moderator)Community Moderator
13 Apr 2025

Hi @TaxquestionsAus,


Here are the general rules for an expense to be deductible.


  1. You must have spent the money yourself and weren't reimbursed.
  2. The expense must directly relate to earning your income.
  3. You must have a record to prove it.

If you're unsure if you meet the requirements, you could seek technical advice so, as @Bruce4Tax mentioned, we can have a look at the compensation payment.

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Income for shared personal and business credit card | ATO Community