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Item D7 - Interest deductions

You cannot claim a deduction for any expenses relating to a First Home Saver Account.

Click this link for information on Item D7 Interest deductions on the ATO website.

Label I - Interest Deductions

Interest Deduction worksheet (idd)

Use the Interest deduction worksheet (idd) to record these deductions. The idd worksheet also contains any amounts integrated from the Motor Vehicle worksheet (mve), the Depreciation worksheet (d), and has direct integration from the ATO Interest and dividends deductions schedule (BJ) if there was a requirement to complete that schedule because the total deductions for both Interest income and Dividends received exceeded $4,999. Refer to Interest and Dividend Deductions (BJ).

If you have used the Interest income worksheet (int) there is a link to the 'idd' from that worksheet. Refer to Interest Income worksheet (int) – individuals.

Interest and Dividend Deductions schedule (BJ)

Where the amount of interest and dividend deductions exceeds $4999, the ATO requires a Schedule BJ to be completed, to itemise each interest and dividend deduction making up the claim.

Thin Capitalisation

If the taxpayer has debt deductions, such as interest, the claim may be affected by the thin capitalisation rules. These rules may apply if:

  • the taxpayer is an Australian resident for tax purposes and has (or any associate entities have) certain overseas interests, and the debt deductions combined with those of the associate entities were more than $250,000 for the current income year, or

  • the taxpayer is a foreign resident with operations or investments in Australia and the debt deductions against Australian assessable income (combined with those of the associate entities) were more than $250,000 for the current income year.

CCH References

16-000 What are income-related deductions?

16-660 Expenses in deriving investment income

16-740 Deductions for interest expenses

16-744 Apportionment of interest deductions

16-746 Prepayments of interest

16-748 When is interest “incurred”?

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