Executive Q & A
Sydney Morning Herald
Tuesday September 22, 1992
QUESTION:
Two months ago I entered into an agreement for an interest-only loan over three years to finance my superannuation contributions until retirement. I am self-employed, and an important consideration was a recent ruling by the Tax Commissioner approving a tax deduction for interest costs on such loans. Will the Budget's withdrawal of this tax break affect me?
ANSWER:
The statement in the Budget was that the Government has decided to remove the tax deductibility of interest on money borrowed to finance personal (that is, not employer) superannuation contributions. This measure applies with respect to all borrowings taken out on or after August 19 last. Interest payable in future on the total amount borrowed up to August 18 last will continue to be a tax deduction. Thus, because you are self-employed, if you made any new borrowing on or after August 19 to finance a superannuation contribution, or refinance your existing borrowing, the interest and other expenses will not be a tax deduction. However interest payable in future on your existing borrowing will continue to be a tax deduction.
© 1992 Sydney Morning Herald