Income Tax Assessment Act 1997

CHAPTER 2 - LIABILITY RULES OF GENERAL APPLICATION  

PART 2-5 - RULES ABOUT DEDUCTIBILITY OF PARTICULAR KINDS OF AMOUNTS  

Division 26 - Some amounts you cannot deduct, or cannot deduct in full  

Operative provisions  

SECTION 26-85   Borrowing costs on loans to pay life insurance premiums  

26-85(1)    
You can only deduct under this Act interest on, or other expenses associated with, money you borrow to pay a premium for a *life insurance policy if:

(a) the *risk component of the premium received by the insurer is the entire amount of the premium; and

(b) each amount the insurer is liable to pay under the policy would be included in your assessable income if it were paid.

26-85(2)    
The risk component of a premium for a *life insurance policy means the amount of the premium worked out on the basis specified in the regulations.