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  • Declare interest correctly

    The person who needs to declare the interest may vary depending on the account type.

    Individual accounts

    If you have earned interest from an account that is only in your name, you need to declare it.

    Phone us on the number in your letter if:

    • you are only a signatory on the account
    • the funds do not belong to you
    • you can substantiate that you will receive no benefit of the funds in the account.

    Joint accounts

    We assume joint account holders have equal beneficial ownership of the funds, and therefore apportion the interest earned or paid equally between all account holders (for example, 50% each for two account holders or 25% each for four account holders).

    If the actual beneficial ownership of the account is not in equal shares, you will need to provide documentation that demonstrates your share. The documentation should show:

    • the source of the funds (for example, bank deposit records)
    • the proportion and nature of the contributions
    • who used the funds and interest.

    If another account holder has incorrectly declared the interest (either in part or in full), phone us on the number in your letter to provide the correct details.

    We may ask you to provide documents to confirm the beneficial ownership of the funds, for example bank statements showing where the source of the funds in the account originated.

    Next step:

    Accounts held for a child

    No matter what type of account it is or the name of the account holder, interest must be declared by the person who owns or uses the funds in the account.

    The parent (or guardian) owns the funds if they deposited the money and spend it as they like, whether or not they spend the money on resources for the child – therefore the parent includes the interest in their tax return.

    See also:

    Accounts held in trust

    Accounts held in trust for other individuals (for example, for a client of a solicitor or real estate agent), should have one of the following in its name:

    • in trust for (ITF)
    • as trustee for (ATF)
    • on behalf of (OBO).

    The person who has beneficial ownership of the funds, that is, the person who benefits from the funds or has the power to influence transaction decisions, should declare the income.

    If you hold an account in trust for another person or entity, you will need to send us a copy of a bank statement showing the correct ownership of the account.

    If you do not have a bank statement showing the correct ownership, you will need to send us other documents showing you hold the account in trust for another person. We recommend you give the financial institution the correct tax file number (TFN) so that this problem does not reoccur.

    Next step:

    Last modified: 11 Feb 2016QC 41727