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Why do we add back Net Investment Loss when calculating 'Repayment Income' for HECS Debt?

Newbie

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I have a few questions relating to Repayment Income as defined for HECS Debt repayment purposes on the following ATO webpage;

https://www.ato.gov.au/Individuals/Study-and-training-support-loans/When-must-you-repay-your-loan/ 

 

1. When calculating Net Invesment Loss, for example for a rental property invesment, would principal loan/mortgage repayments be included in this calculation or not? 

2. Conceptually, why is Net Invesment Loss added back to taxable income to get to 'Repayment Income'? I presume the logic is that the government would prefer individuals to prioritise repayment of HECS debt over making personal (potentially loss making) invesments, hence the penalty?

 

Kind Regards

Barney

 

 

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Devotee

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You would only need to add back the amount of rental loss claimed in your tax return.  This would include just the interest expense, not any of the principal component of loan repayments.

 

You thought on why the loss is added back are probably correct.  

1 REPLY 1

Most helpful response

Devotee

Replies 0

You would only need to add back the amount of rental loss claimed in your tax return.  This would include just the interest expense, not any of the principal component of loan repayments.

 

You thought on why the loss is added back are probably correct.