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I Investment expenses

Last updated 12 February 2019

Show at I the amount of deductible expenses of a revenue nature incurred in deriving investment income, unless the deduction is more appropriately shown at another label. Do not include any amount that you show at J Management expenses or Q Administration expenses.

Complying superannuation funds and complying ADFs may claim deductions for expenses incurred in relation to acquiring, holding or disposing of:

  • units in a PST
  • life insurance policies issued by life insurance companies
  • interests in trusts whose assets consist wholly of such life insurance policies.

The fund can claim the expenditure as a deduction if the expenditure would qualify for deduction under the provisions of the ITAA 1936 or the ITAA 1997 if any profits, gains or bonuses received from the investments listed above that are not assessable income were instead included in assessable income.

Our view on the application of the relevant provision (section 295-100 of the ITAA 1997) is set out in Taxation Determination TD 1999/6 Income tax: what is the purpose of sections 279E and 289A of the Income Tax Assessment Act 1936?

The fund cannot deduct amounts for investment charges that the PST or life insurance company deducts from gross contributions transferred to it from the fund. In this case, the charges are of a capital nature as they reduce the amount of the investment, and are therefore not deductible.

Complying superannuation funds cannot deduct amounts for fees or charges incurred for ‘complying superannuation/FHSA life insurance policies’, exempt life insurance policies, or units in a PST that are segregated current pension assets of the fund, other than amounts claimed at F Death or disability premiums.

QC44343