D7 Interest deductions 2022

Complete question D7 to claim expenses incurred from interest income you have declared at question 10.

Last updated 25 May 2022

This question is about expenses you incurred in earning any interest you declared at item 10.

Your expenses may include:

bank or other financial institution account-keeping fees for accounts held for investment purposes
management fees and fees for investment advice relating to changes in the mix of your investments
interest you paid on money you borrowed to purchase income-producing investments.

Show any expenses incurred in earning trust and partnership distributions at X and Y item 13 on your tax return.

Do not show expenses incurred in earning foreign source interest at this item. They are taken into account at item 20 or D15 on your tax return.

Did you have any interest deductions?

No	Go to question D8 Dividend deductions 2022, or return to main menu Individual tax return instructions 2022.
Yes	Read on.

Answering this question

You will need your bank or financial institution statements or passbooks.

If you had any joint accounts or other interest-earning investments, show only your share of the joint expenses. This will be half if you held the account or investment equally with one other person. Keep a record of how you worked out your proportion if you and the other investors or account holders did not share the expenses equally.

If you borrowed money to purchase assets for your private use and income-producing investments, you can claim only the portion of the interest expenses relating to the income-producing investments.

You can also claim a proportion of the decline in value of your computer based on the percentage of your total computer use that related to managing your investments. If you used your computer to manage your investment in both interest-earning investments and investments in shares or similar securities, then you can claim only the proportion of the decline in value related to managing those investments once, at either item D7 or D8.

You cannot claim expenses you were charged for drawing up an investment plan unless you were carrying on an investment business, in which case you would claim any expenses at item P8 Business income and expenses on the Business and professional items schedule for individuals 2022. If this applies to you, then you should lodge your tax return using myTax or a registered tax agent.

If you are unable to use myTax or a registered tax agent, contact us on 13 28 66 and we will mail you a paper tax return and Business and Professional items schedule.

If you incurred particular types of expenses, such as interest on borrowed money, relating to certain overseas investments (or investments in Australia if you were a foreign resident), your claims may be affected by the thin capitalisation rules. These rules may apply if the total of your debt deductions and those of your associates is more than $2 million for 2021–22.

See also