Default Interest

[IshQ]

Hey Guys

I tried searching the treads on here and the ATO website regarding default interest but failed to find a suitable answer to my question.

My question:- Can default interest (due to delayed settlement) be claimed as a tax deduction or should it be capitalised.

Logic tells me it should be capitalised but I could be wrong.

Thoughts??

 

[Mry]

Deductible when incured (for the purchase of an IP of course).

 

[IshQ]

Thank Mry.

Do you have any links / supporting documents?

 

[Mry]

Its just plain ordinary interest, incurred in acquiring a rental property. Only in a few instances would you ever capitalise interest, and this is not one of them.