claiming interest on BA loan fees

[Logan]

I am considering using equity to engage a BA for a few upcoming purchases, would the interest on the funds used to engage the BA be tax deductible ?

As I would be financing the BA from equity I planned to just add the BA fees to the equity loan. Would this work or would I need to at it to my LOC ?

 

[NPB]

I am considering using equity to engage a BA for a few upcoming purchases, would the interest on the funds used to engage the BA be tax deductible ?

As I would be financing the BA from equity I planned to just add the BA fees to the equity loan. Would this work or would I need to at it to my LOC ?

The fee is a capital cost , the interest on the fee can be claimed

 

[Logan]

The fee is a capital cost , the interest on the fee can be claimed

Thanks NPB - sorry what do you mean by a capital cost ?

 

[NPB]

Thanks NPB - sorry what do you mean by a capital cost ?

added to the cost base of the property , used in determining the capital gains tax payable upon sale

 

[Logan]

excellent thanks - cost base I understand

 

[Paul@PFI]

The nature of the BA engagement will determine if it is a CGT cost base element. Refer to ID 2003/361 where a engagement results in an acquisition. If the terms of engagement are not connected with a potential acquisition the cost may be considered preliminary.

Where a capital cost is incurred using borrowed funds the interest and borrowing costs (over a period of time) should also be deductible.