Did you know you can claim a deduction for expenses incurred in earning interest, dividend or other investment income.
Your expenses might include:
- account-keeping fees for accounts held for investment purposes
- management fees and fees for investment advice
- interest charged on money borrowed to purchase shares or other investments.
In this article we will cover followinginterest, dividend and other investment tax deduction questions:
- Interest income from bank accounts and income bonds?
- Dividend and share income expenses?
- LIC capital gain amount tax deduction?
1. Interest income from bank accounts and income bonds?
Interest income earned from bank accounts, you can claim account-keeping fees. You will find these fees listed on your statements.
If have a joint account, you can only claim your share of fees, charges or taxes on the account. For example, if you hold an equal share in an account with your spouse, you can only claim half of any allowable account-keeping fees paid on that account.
Income bonds are a type of life insurance policy only friendly societies issue. They are sometimes marketed as 'bonus bonds' or 'savings bonds'. Unlike other life insurance policies, which pay bonuses on maturity or surrender, an income bond is like a savings account and distributes regular bonuses. For tax purposes, these bonuses are treated in the same way as interest.
2. Dividend and share income expenses?
You can claim a deduction for interest charged on money borrowed to purchase shares and other related investments from which you derived dividend income.
Only interest expenses incurred for an income-producing purpose are deductible. In addition, following expenses can be claimed if they were incurred in managing your investments
- Ongoing management fees or retainers and amounts paid for advice
- travel expenses
- the cost of specialist investment journals and subscriptions
- borrowing costs
- the cost of internet access
- the decline in value of your computer.
3. LIC capital gain amount tax deduction?
If you were an Australian resident when a listed investment company (LIC) paid you a dividend, and the dividend included a LIC capital gain amount, you can claim a deduction of 50% of the LIC capital gain amount.
Top Accountants Tax Tip: Need help lodging your tax return? Top Accountants specialise in tax return services. We specialise in claiming maximum tax refund by taking the risk & hassle out of the complex tax regulations.
This information is intended as a guide. All actual detail and circumstances differ, refer to ATO website for current legislation. Please discuss your situation with Top Accountants at https://topaccountants.com.au/tax-return
Contact our tax accountants at 1300 009 007 or info@topaccountants.com.au