ATO Tax Interest Question GIC and SIC

lilyesp on 09/09/2025 - 06:04
Last edited 09/09/2025 - 09:03

Hi All

Had a question about overdue payments and interest charged by ato given they are not taxable from July 1 2025:

GIC and SIC incurred before 1 July 2025 can be claimed as a deduction in your tax return for the income year in which it is incurred.

You can claim GIC or SIC incurred before 1 July 2025 as a deduction

My father's tax from 23-24 was literally a year late he owed a few thousand. Given he just submitted it and the interest was processed /calculated in 2025 September does that mean the interest charged between 2024 snd 1st july 2025 will not be taxable ( or does he have to work out the interest charged till July 1st 2025 and anything after that isn't taxable?

Edit He did call ato to see if the interest can be forgiven but they said it can be requested only after it has been paid

Financial Taxation

Comments

  • bemybubble on 09/09/2025 - 06:21
    +1

    If the date interest charged on your Income Tax Statement or portal has a date before 1 July 2025 it can be deductible.

    Keep in mind that if the tax debt hasn’t arisen from business income then it was never deductible anyway…

    • lilyesp on 09/09/2025 - 09:02

      Thanks. The period that thr interesr incurred is before 1st july 2025. But then given he submitted it in September this yr they only calculated the interest now.
      Though from july 2024 till till july 2025 will be the need work out how much was earned interest between july to sept 2025

      He did call ato to see if the interest can be forgiven but they said it can be requested only after it has been paid

      • bemybubble on 09/09/2025 - 09:28
        +1

        Look on your ato statement. If the interest date is dated after 1 July (the interest) then it’s simply that. Not deductible

        He did call ato to see if the interest can be forgiven but they said it can be requested only after it has been paid

        Edit: that’s correct. Once the debt is paid (minus interest) you can go in to bat

  • Chookt on 09/09/2025 - 21:23

    I think Example 5 in the link applies to your dad’s circs
    https://www.ato.gov.au/law/view/document?docid=AFS/deduction…

    • lilyesp on 09/09/2025 - 21:57

      Thanks thats useful
      His iniital notice of assessment was given 2024 july …for the year 23-24. The interest etc was charged in august 2025…i assume then it is stil tax deductible

      • Chookt on 09/09/2025 - 22:18

        Oh, I’m a bit unclear then.

        When you say initial, does that mean he received an amended assessment recently (in which case see Example 9 - not deductible)? Or did he just receive an initial assessment but only paid it recently (in which case see Example 2 - partly deductible)?

    • bemybubble on 11/09/2025 - 08:16
      +1

      On the money mate. Literally my point above

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