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Q&A: Funding discretionary trust distributions; deductibility of interest


The Commissioner has issued a final ruling TR 2003/9 on the deductibility of interest incurred by a trustee on borrowed funds used to pay distributions to beneficiaries.

In this article we focus on its application to trustees of discretionary trusts. Where the trust has fixed entitlements and all of the trust's activities are income earning, the Ruling confirms that the interest should be deductible.

Author profiles:

Graham is a Solicitor at Hall & Wilcox Lawyers.
Current at May 2005
Click here to expand/collapse more articles by Graham WARREN.
Keith James CTA
Keith is a Partner at Hall and Wilcox and is a member of the Taxation and Private Clients practice groups. Keith is a key figure in the tax advisory profession. He has been the Deputy Chair of the Board of Taxation since early 2011 and a member since 2004. His involvement has extended to Chairman of the Public Accountants Committee, Victorian President, National Councillor, Chairman of the Taxation Centre of Excellence and member of the National Tax Advisory Committee for CPA Australia. Keith was for many years a member of The Tax Institutes Victorian and National Education Committees. In October 2008 he was awarded a Meritorious Service Award by the Institute. Keith has had extensive experience in the construction and development fields. He is a director of Dennis Family Holdings. Current at 17 October 2013 Click here to expand/collapse more articles by Keith JAMES.
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