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  • myTax 2019 Interest deductions

    This section is about expenses you incurred in earning any assessable interest income.

    On this page:

    Essentials

    Your expenses may include:

    • bank or other financial institution account-keeping fees for accounts held for investment purposes
    • management fees and fees for investment advice relating to changes in the mix of your investments
    • interest you paid on money you borrowed to purchase income-producing investments.

    If you had any joint accounts or other interest-earning investments, show only your share of the joint expenses. This will be half if you held the account or investment equally with one other person. Keep a record of how you worked out your proportion if you and the other investors or account holders did not share the expenses equally.

    If you borrowed money to purchase assets for your private use and income-producing investments, you can claim only the portion of the interest expenses relating to the income-producing investments.

    You can also claim a proportion of the decline in value of your computer based on the percentage of your total computer use that related to managing your investments. If you used your computer to manage your investment in both interest-earning investments and investments in shares or similar securities, then you can claim only the proportion of the decline in value related to managing those investments once. You claim the amount at either Interest deductions or Dividend deductions.

    If you incurred particular types of expenses, such as interest on borrowed money, relating to certain overseas investments (or investments in Australia if you were a foreign resident), your claims may be affected by the thin capitalisation rules. These rules may apply if the total of your debt deductions and those of your associates is more than $2 million for 2018–19. For more information, see Thin capitalisation - how the rules work.

    Depreciation and capital expenses

    Individual taxpayers generally can't immediately deduct spending on items costing more than $300; instead you claim the cost over time, reflecting the asset's depreciation (or decline in value).

    Depreciation claims need to meet the following conditions:

    • you must apportion your claim to reflect the percentage that the asset was used for income generation purposes.
    • you must have directly incurred the cost of the asset and it was not reimbursed.

    You can use the Depreciation and capital allowances tool to work out any decline in value deduction as well as any deductible balancing adjustment when you stop holding a depreciating asset.

    The tool can be accessed in the Deductions section on the Prepare return screen.

    Do not show at this section

    Do not show the following types of interest expenses at this section:

    • Any expenses incurred in earning trust and partnership distributions. Show these at Partnerships or Trusts in the Business/sole trader, partnership and trust income (including loss details) section.
    • Expenses incurred in earning foreign source interest. They are taken into account at Other foreign income in the Foreign income, assets and entities section or at Other deductions in the Deductions sections.
    • Expenses you were charged for drawing up an investment plan unless you were carrying on an investment business, in which case you would claim any expenses at Business income or losses in the Business/sole trader, partnership and trust income (including loss details) section.

    If you can't see these sections, use the Personalise return screen to select those sections that apply to you. For further help with personalising your return, read How to personalise your return.

    Completing this section

    You will need your bank or financial institution statements or passbooks.

    1. For each interest deduction expense, select Add and enter information into the corresponding fields.
    2. Select Save.
    3. Select Save and continue.

    Note: If you used the Depreciation and capital allowances tool, fields containing information from the tool cannot be directly adjusted in myTax. To make any adjustments to this information, or to add new assets to the tool, select 'Use the depreciation and capital allowances tool'.

    See also:

      Last modified: 26 Jun 2019QC 58930