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IQ Graduate | Interest Expenses

Graduate IQ-4. The issues and problem areas that arise when clients incur interest expenses.

The tax treatment of interest expenses can be a complex area and is one that often comes under ATO scrutiny, especially when the amounts involved are significant.   And, over the last few years, changes to the tax rules have made it more difficult for some clients to claim deductions for interest expenses relating to property. 

We look at the common issues and problem areas that arise when clients incur interest expenses. We walk through the areas where clients often make mistakes and where accountants can provide proactive advice to improve tax outcomes for clients.

This module is available as part of the Accounting Graduate IQ Program.

1.5 CPD Hours (Tax) including Q&As

Accreditation 022403
Total 1.5 CPD Hours

What we cover

With practical examples and embedded Q&As, we explore:

General principles and the ‘golden rule’
Offset vs redraws
Jointly owned rental properties
Interest expenses incurred before / after income is generated
- Holding costs in respect of vacant land
- Where residential premises are being constructed, when does land stop being vacant?
- The exceptions
- What happens to the denied deductions?
- Exceptional circumstances
- Repairs and minor renovations
On-lending arrangements
How to deal with mixed purpose loans
Refinancing loans and the impact on deductions
Borrowing to pay tax debts
Other tax issues associated with interest
- Penalty interest
- Prepayment rules
- Borrowings from overseas

Karen Vella

Tax Training Team Leader, TaxBanter

Karen has over 25 years experience in the tax profession, first as a practitioner and more recently as an educator. She trained with the Big Four and initiated her own successful small practice before moving to Hayes Knight as a Partner.

Prior to joining TaxBanter, she spent many years as a trainer and technical writer for Webb Martin Training, and then most recently TaxBytes. She is also a regular presenter and consultant for Knowledge Shop.

Karen loves to talk tax. She has provided tax training to clients ranging from the Australian Taxation Office to accounting firms, both large and small. Her specialty is translating complex content into something meaningful, engaging and practical for her clients, no matter their level of experience.