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16 Jul 09 Deductibility of interest when borrowed moneys settled on trust - TD 2009/17

This final Taxation Determination was issued on 15 July 2009. It was previously released in draft form as TD 2008/D16. Its full title is "Income tax: is interest on a loan fully deductible under s 8-1 of ITAA 1997 when the borrowed moneys are settled by the borrower on trust to benefit the borrower and others?:

The answer given is "No...The taxpayer's interest expense can only be deducted to the extent to which the taxpayer has used the borrowed moneys to gain or produce assessable income of the taxpayer. The interest will not be deductible to the extent that the taxpayer has used the borrowed moneys for the purpose of benefiting persons other than the taxpayer."

For a copy of TD 2009/17, go here


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