I Investment expenses



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Show at I the amount of expenses of a revenue nature incurred in deriving investment income, unless allowed by other specific income tax provisions. Do not include any amount that you show at J Management and administration expenses.

Complying funds and complying ADFs may claim deductions for expenses incurred in relation to acquiring, holding or disposing of:

  • units in a PST
  • life insurance policies issued by life insurance companies, or
  • interests in trusts whose assets consist wholly of such life insurance policies.

You can claim the deduction if the expenditure would qualify for deduction under the deduction provisions of the ITAA 1936 or the ITAA 1997 as if any profits, gains or bonuses derived from investments in PSTs, life insurance policies or interests in trusts (as above) that are of a capital nature, were instead assessable as being of an income nature.

Our view on the application of the relevant provisions (section 295-100 of the ITAA 1997) is set out in Taxation Determination TD 1999/6 Income tax: what is the purpose of sections 279E and 289A of the Income Tax Assessment Act 1936?

Investment charges that are deducted by the PST or life insurance company from gross contributions transferred from the fund, result in a reduced amount of contributions for investment by the PST or the life insurance company. In this case, the charges are of a capital nature as they reduce the amount of the investment, and are therefore not deductible.

However, you cannot deduct amounts of expenses for fees or charges incurred for 'complying superannuation/FHSA life insurance policies', exempt life insurance policies, or units in a PST that are segregated current pension assets of the fund, other than amounts claimed at F Death or disability premiums.

Last modified: 25 Nov 2009QC 21714