Interest, dividend and other investment income deductions
You can claim a deduction for expenses incurred in earning interest, dividend or other investment income.
You cannot claim a deduction for receiving an exempt dividend or other exempt income.
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Interest income expenses
You can claim account-keeping fees where the account is held for investment purposes - for example, a cash management account. You will find these fees listed on your statements or in your passbooks.
If have a joint account, you can only claim your share of fees, charges or taxes on the account. For example, if you hold an equal share in an account with your spouse, you can only claim half of any allowable account-keeping fees paid on that account.
Dividend and share income expenses
You can claim a deduction for interest charged on money borrowed to purchase shares and other related investments from which you derived assessable interest or dividend income.
Only interest expenses incurred for an income-producing purpose are deductible.
If you used the money you borrowed for both private and income-producing purposes, you must apportion the interest between each purpose.
What you can claim
- Ongoing management fees or retainers and amounts paid for advice relating to changes in the mix of investment.
- A portion of other costs if they were incurred in managing your investments, such as
- travel expenses
- the cost of specialist investment journals and subscriptions
- borrowing costs
- the cost of internet access
- the decline in value of your computer.
- If you were an Australian resident when a listed investment company (LIC) paid you a dividend, and the dividend included a LIC capital gain amount, you can claim a deduction of 50% of the LIC capital gain amount.
What you can't claim
You can't claim a fee charged for drawing up an investment plan unless you were carrying on an investment business.
Some interest on money borrowed to purchase shares, units in unit trusts and stapled securities, which is attributable to capital protection under a capital protected borrowing, is not deductible and is treated as a payment for a put option.
Forestry managed investment scheme deduction
If you make payments to a forestry managed investment scheme (FMIS), you may be able to claim a deduction for these payments if you:
- currently hold a forestry interest in an FMIS, or held a forestry interest in an FMIS during the income year, and
- have paid an amount to a forestry manager of an FMIS under a formal agreement.
You can only claim a deduction if the forestry manager has advised you that the FMIS satisfies the 70% direct forestry expenditure rule in Division 394 of the Income Tax Assessment Act 1997.
You can claim a deduction if you are able to show that you incurred expenses earning interest, dividend or other investment income.