Did the SMSF incur interest expenses on money borrowed from an Australian source?
Leave A1 and A2 blank. Go to B1 and B2.
Write at A1 and A2, as required, the amount of interest that the SMSF incurred in 2017–18 on money borrowed from an Australian source.
Deductible interest expenses within Australia
Write at A1 the amount of deductible interest expenses incurred on borrowings from sources within Australia.
For example, interest expenses incurred on borrowings are deductible to the extent the borrowed money is used to:
- acquire assets for the purpose of earning assessable income
- finance operations for the purpose of earning assessable income, or
- meet current expenses incurred for the purpose of earning assessable income.
Do not include at A1 interest expenses (or any part of such expenses) that relate to earning:
- foreign income (see Expenses that relate to foreign income)
- non-arm's-length income (see Expenses that relate to non-arm's-length income).
If the SMSF paid retirement phase income stream benefits to a member, refer to Self-managed super funds and tax exemptions on pension assets before you claim a deduction for the SMSF's interest expenses incurred on borrowings from Australian sources.
Non-deductible interest expenses within Australia
Write at A2 the amount of interest expenses that the SMSF incurred on borrowings from Australian sources that is not deductible. This includes an amount of interest expense to the extent it is incurred for the purposes of earning exempt income.