What type of investment expenses qualify for a deduction?

Are you?
– A taxpayer?

At a glance:
– Deductions may be available for expenses incurred in producing assessable interest, dividend or other investment income.

You should:
– Ensure the expenses claimed are for income-producing purposes.
– Contact us if you require any clarification or advice.

Investment expenses incurred in producing assessable income may be deductible if incurred for:

• Account-keeping fees where the account is held for investment purposes (such as a cash management account);
• Interest charged on money borrowed to purchase shares and other related investments; and
• Ongoing management fees or retainers and amounts paid for advice relating to a change in investment mix.

If the interest expense is attributable to capital protection under a capital protected borrowing, it is not deductible and is treated as a payment for a put option.

Other expenses incurred in managing a taxpayer’s investments may also be deductible, including:

• Travel expenses;
• The cost of specialist investment journals and subscriptions;
• Borrowing costs;
• Internet expenses; and
• Depreciation of a computer.

Deductions may not be available for certain expenses, such as fees charged for drawing up an investment plan unless the taxpayer is carrying on an investment business.

For more information, click here.

Remember:
– Interest expenses must be apportioned between private and income-producing activities.