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

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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

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Devotee Registered Tax Practitioner

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

 

Yes  -  declare interest  +  claim deduction.

 

Peferable, according to NTAA tax schools a few years ago  -  say 1%

 

Loan should be properly documented  e.g. loan agreement, minutes.

 

 

1 REPLY 1
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Most helpful response

Devotee Registered Tax Practitioner

Replies 0

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

 

Yes  -  declare interest  +  claim deduction.

 

Peferable, according to NTAA tax schools a few years ago  -  say 1%

 

Loan should be properly documented  e.g. loan agreement, minutes.