Interest income expenses
You can claim a deduction for account-keeping fees you incur on an account held for investment purposes, such as bank accounts or income bonds. You will find these fees on your statements.
If you have a joint account, you can only claim your share of the 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.
You can't claim a deduction for interest you incur on a personal tax debt. For example, you can't claim the interest on a loan you take to pay your personal tax debt.
Investment seminars
If you attend an investment seminar about an existing investment, you may be entitled to claim a deduction for the portion of your expenses that relate to earning investment income.
You can't claim a deduction to attend a seminar about something you're considering investing in, even if you subsequently invest in it.
Dividend and share income expenses
There are certain deductions you can claim relating to your dividend and share income expenses, and some you can't claim.
What you can claim
You can claim a deduction for costs you incur to invest in shares, including:
- limited financial advice fees, for example, ongoing management fees or advice about changes in your investment mix
- the portion of your costs that are for managing your investments, for example
- some travel expenses, such as to attend the annual general meeting of a company you hold shares in
- the cost of specialist investment journals and subscriptions
- borrowing costs and interest
- the cost of internet access
- the decline in value of your computer
- 50% of the listed investment company (LIC) capital gain amount – if you were an Australian resident when a listed investment company paid you a dividend, and the dividend included a LIC capital gain amount.
What you can't claim
When you invest in shares, you can't claim:
- financial advice fees about your future income earning structure or where there is no connection with income earning activities
- some interest expenses where you borrow money under a capital protected borrowing arrangement to buy shares, units in unit trusts and stapled securities. The interest is treated as the cost of the capital protection feature
- brokerage fees and other transaction costs (but you can include these costs to work out your capital gains tax when you sell the shares).
Interest you pay on borrowed money
If you borrow money to buy shares or related investments from which you earn dividends or other assessable income, you can claim a deduction for the interest you pay.
Only interest expenses you incur for an income-producing purpose are deductible.
If you use the money you borrow for both private and income-producing purposes, you must apportion the interest between each purpose.
You can't claim a deduction if you receive an exempt dividend or other exempt income.
Rental and holiday home expenses
If you own a rental property, including a holiday home, see rental expenses you can claim in the Rental property guide.
Forestry managed investment scheme deduction
If you make payments to a forestry managed investment scheme (FMIS), you may be able to claim a deduction for these payments if you both:
- currently hold a forestry interest in an FMIS, or held a forestry interest in an FMIS during the income year
- have paid an amount to a forestry manager of an FMIS under a formal agreement.
You can only claim a deduction if the forestry manager has advised you that the FMIS satisfies the 70% direct forestry expenditure rule in Division 394 of the Income Tax Assessment Act 1997.