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Tax deductability of interest


The cost of interest, whatever it secures, is fundamentally the time cost of money and does not itself represent a lasting or enduring asset. The payment for goods, land, shares, trading stock, etc. will usually result in the conversion of the money paid into an asset : the asset represents the money which it replaces and may, at least in principle, be converted back into money. That is not the case with interest : it is paid for the time use of capital and, like time itself, disappears. Interest is the paradigm example of a revenue expense.

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Justice Gaetano Pagone
The Hon. Tony Pagone was appointed to the Federal Court of Australia in June 2013. Prior to this appointment, he was a judge of the Trial Division and had been the judge in charge of the Commercial Court of the Supreme Court of Victoria. Justice Pagone graduated from Monash University in 1979 with a Bachelor of Laws and from Cambridge University with a Master of Laws (First Class Hons) in 1983. He was admitted as a practitioner in 1980 and signed the roll of counsel in 1985. Justice Pagone was appointed Queen’s Counsel for Victoria in 1996. During his career at the Bar, Justice Pagone practised widely in taxation law, commercial law, administrative law, constitution law, public and human rights law. He was also a part-time member of the Administrative Appeals Tribunal and Special Counsel to the Australian Taxation Office. In 2014, he obtained an LLD from the University of Melbourne for his contribution to scholarship in the field of anti-tax avoidance. He teaches regularly in tax in the University of Melbourne graduate program. - Current at 19 May 2017
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