Interest deductibility in certain arrangements

This paper deals with the issue of whether interest is deductible in certain arrangements where the principal on which interest is payable is not directly used in an income earning process or business. 

Related documents

This issues paper is a revision of:

IRRUIP3: Interest destructibility

This issues paper resulted in the following rulings:

BR Pub 07/04-BR Pub 07/09: Interest deductibility - Roberts and Smith - borrowing to replace and repay amounts invested in an income earning activity or business

These earlier rulings were replaced by: 

BR Pub 10/14-BR Pub 10/19: Interest deductibility - Roberts and Smith - Borrowing to replace and repay amounts invested in an income earning activity or business

These earlier rulings were replaced by: 

BR Pub 15/04-BR Pub 15/09: Income tax - interest deductibility - Roberts and Smith - borrowing to replace and repay amounts invested in a business or other income-earning activity

About issues papers

Inland Revenue’s Tax Counsel Office (Public Advice and Guidance) develops and publishes public statements interpreting the tax laws.

Where significant uncertainty exists, it helps us to hear from interested parties before we prepare a public statement. This generates discussion so we gain a better understanding of the issues, including practical concerns. An issues paper sets out our initial views on how the relevant tax laws may apply. If it results in the issue of a draft public statement, public consultation will occur in the usual manner.

Given that issues papers produced by the Tax Counsel Office represent our initial views only, taxation officers, taxpayers and practitioners must not rely on them. Only finalised public statements represent authoritative statements by Inland Revenue of its stance on the issues covered. 

Any views presented in an issues paper do not change the Commissioner’s current position or practices.

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