EV 1052124432928currentnon-binding advice

Deductions- interest

Non-binding edited private advice. This is an edited version of private advice the ATO gave to a specific taxpayer about their own circumstances. You cannot rely on it — it is not binding and provides no protection for anyone else (see PS LA 2008/4). Use it as a guide to the ATO’s thinking, not as authority.

1

1 Is the interest charged by the bank for the portion of the loan associated with income-generating activities tax deductible?

2

Yes. The interest can be claimed as a deduction for losses and outgoings if incurred in gaining or producing assessable income. This ruling applies for the following period 30 June 20XX The scheme commenced on: 1 July 20XX

3

You currently have a home loan that has a redraw facility. You run a business as a sole trader. You will be taking time off in the relevant year but will have several business expenses as you have hired a contractor handle your work. You would like to withdraw an amount to pay off existing debt due to business expenses, with possible additional withdrawals later. As a result of making this withdrawal the interest on the loan will increase.

4

Income Tax Assessment Act 1997 section 8-1