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Re: Interest deduction on money on-lent to a discretionary trust

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Initiate

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Replies 1

Hi,

 

I borrowed some money & on-lent the money to a discretionary trust to which I'm a beneficiary to enable the trust to buy a business asset.

I charged the the trust the same interest as the interest I incurred on my bank loan.

Can I claim the interest deduction in my personal ITR (effectively nil effect as interest deduction = interest income from the trust)?

Do I need to charge a margin to the trust? It'd be appreciated if anyone could point me to an ATO guidance on this issue.

 

Thanks

 

1 ACCEPTED SOLUTION

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Most helpful response

Devotee

Replies 0

You can claim interest on the loan and you don't have to earn a margin. If it were the other way (i.e. trying to claim a net loss) you would have issues.

1 REPLY 1
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Most helpful response

Devotee

Replies 0

You can claim interest on the loan and you don't have to earn a margin. If it were the other way (i.e. trying to claim a net loss) you would have issues.