| Disclaimer This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law. You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4. |
Edited version of your written advice
Authorisation Number: 1051235273809
Date of advice: 9 June 2017
Ruling
Subject: Deductibility of interest expenses
Question 1
Are the interest expenses deductible?
Answer:
Yes.
The deductibility is determined by the use of the borrowed money. If the money is used to buy income producing property, the interest expense is an allowable deduction.
This ruling applies for the following periods:
Year ended 30 June 2016
The scheme commenced on
1 July 2015
Relevant facts and circumstances
Your spouse owned a property (property A) in which you both lived; it was your primary place of residence.
You and your spouse moved out of property A and purchased another house and moved into that (property B).
Your spouse transferred property A to you under the 'Natural Love and Affection’ clause for a sum of money.
You took out an investment property loan in your own name for the exclusive purpose of acquiring the property.
The loan funds are not used for any private purpose.
Property A is being let through a property manager at commercial rates
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 8-1
Copyright notice
© Australian Taxation Office for the Commonwealth of Australia
You are free to copy, adapt, modify, transmit and distribute material on this website as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).
