Things you need to know
Interest expenses you can claim relate to expenses you incurred in earning interest from any source in Australia. This includes accounts and term deposits held with financial institutions in Australia.
Your interest 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.
What you can claim
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 question D7 or D8. See Guide to depreciating assets 2023 if you are claiming a deduction for the decline in value on your computer.
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 2022–23. For more information, see Thin capitalisation – how the rules work.
What you can't claim
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 question P8 Business income and expenses on the Business and professional items schedule for individuals 2023. 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 and we will mail you a paper tax return and Business and Professional items schedule.
Interest expenses you claim at another question
Do not show at question D7 any interest expenses incurred in:
- earning trust and partnership distributions – they are taken into account at labels X and Y question 13 in your tax return
- earning foreign source interest – they are taken into account at question 20 or D15 in your tax return.
Did you have any interest deductions?
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No |
Go to question D8 Dividend deductions 2023, or return to main menu Individual tax return instructions 2023. |
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Yes |
Read on. |
What you need to answer 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.
Completing your tax return
To complete this question, follow steps 1 and 2 below.
Step 1
Add up all your deductions for this question.
Step 2
Write the total amount at question D7 – label I.
Where to go next
- Go to question D8 Dividend deductions 2023.
- Return to main menu Individual tax return instructions 2023.
- Go back to question D6 Low-value pool deduction 2023.