Could someone please comment on this query I am having with the ATO.
I have claimed a deduction for the interests paid for an investment loan taken out in joint names with my partner. The interests claimed were halved in each of our tax returns. The loaned money was used to purchase shares , bought mostly in my name as I have a lower income. Around 10% of the shares are in my partner's name and 90% in my name. I get a call from the ATO saying that my partner can only claim 10% of the interests paid to correlate this to the share proportion in my partners name. This has never been brought up by my tax accountant in previous years that I have used them. I am currently doing my own tax returns.
I told the ATO that I am currently looking at taking out another investment loan in my partner's name only and use that money to purchase more shares in my name only. As I do not have a salary, the bank will not entertain me and so we decided to leave it in my partner's name only. I asked the ATO, does this mean my partner cannot claim any deductions from these interests paid to the bank. ATO will seek technical department and get back to me.
Would greatly appreciate comment from someone with a similar experience.
Below is an extract from ATO website explaining Deductions for Interests Expense:
"If you had any joint accounts or other interest-earning investments, show only your share of the joint expenses. This will be half if you held the account or investment equally with one other person. Keep a record of how you worked out your proportion if you and the other investors or account holders did not share the expenses equally."
