Hi. I recently signed up with the nab and westpac balance transfer offers, and put the money into my ubank to earn some interest. Both cards have annual fees of $30 and $45 respectively. Would I be able to claim them as a tax deduction as they were expenses incurred in earning interest? I only signed up for the balance transfer deals to put it in the bank, not to pay off any debt. Thanks.
Claiming credit card annual fee as tax deduction?
tqf8h on 18/06/2014 - 02:01
Comments
In long, no.
In summary, no.
Tl;dr, no.
In gangster, hell no.
You can claim what you want, whether the tax office accepts it if you are audited is a different matter!
Card fees are claimable where the card is used for business expenses, and you can attribute the fee based on the percent of business use (e.g. 60% of the fee claimable) so I can see your argument.
I am not aware of a rule that says you cannot make such a claim, but would be happy to be corrected.
I think the question is that you are using the finance facility in the opposite way to what has traditionally happened, so there is a inclination to say no.
My view would be if you borrowed money to buy a house or invest in shares, you would be able to claim the borrowing costs and interest as a deduction.
This is really what you are doing here too.
Assuming you make no personal purchases and use the cards only for the purpose of investment, it looks like a legitimate expense to me, and so a legitimate claim.
You could possibly have issues if the original balance was accrued via purchases etc, but if it was a cash advance you used to invest, it would seem ok.Great question, and note I am in no way a pro at tax advice.
Thanks for your informative reply. I guess I won't claim it then, since the general consensus is no. $75 isn't that much anyway, I'd rather not get audited over it.
if it's a 100% income generating account, can you claim 100% deduction.
if you use it 20% for income generation (e.g. you do personal shopping but also have cash in there for earning interest), then you can claim 20%.
In short, no.