Guide to investment

Deductions from trust income

Tax deductions for managed investment trusts can include management fees, specialist journals and interest on money you borrowed to invest.

If you made a prepayment of $1,000 or more for something to be done (in whole or in part) in a future income year, the amount you can deduct may be affected by the rules relating to prepayments.

For more information on prepayments, refer to Deductions for prepaid expenses.

Thin capitalisation rules

If you've incurred deductible debt expenses (such as interest and borrowing costs) in relation to a distribution from a trust, the amount you can deduct may be affected by the thin capitalisation rules.

The thin capitalisation rules can apply to both Australian and foreign entities that have multinational investments.

If you are not affected by the thin capitalisation rules for a given income year, you can claim your allowable debt deductions in full.

For more information, refer to Thin capitalisation - what you need to know.

Expenses you can't claim

You can't claim a deduction for expenses incurred in deriving exempt income or non-assessable non-exempt income, such as expenses incurred in deriving distributions on which family trust distribution tax or trustee beneficiary non-disclosure tax has been paid.

You also can't claim a deduction for amounts the trust has already claimed or that only the trust can claim, for example, expenditure on landcare operations or water facilities.

	For more information on deductions for expenditure on landcare operations and water facilities, refer to: Guide to depreciating assets Tax return supplementary instructions T11 - Landcare and water facility
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Sections within Managed investment trusts

• Trust income and credits
• Deductions from trust income
• Trust losses
• Capital gains from a trust