Home – New Forums Money matters C/C Interest as a legitimate expense?

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  • #983856
    automation
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    I do apologise if this has been covered in the past. I have searched and searched with no great luck!

    This is coming from a sole-trader perspective… Now, I know I need a good accountant, we are working on that… but in the meantime I am looking for an answer on what I thought would be an easy question??!! LOL.

    We have a (personal) CC, this CC is used for sole trader purposes only. Is the interest on this card then a legitimate expense? The Interest is not huge, as we usually run very well, but sometimes things happen…

    So, it is the interest a legitimate expense? Thanks in advance :)

    #1144635
    Jason@Plumsale
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    Yes, see an accountant.

    If you use the card for only business purchases then I can’t see why you can’t claim the interest as an expense.

    #1144636
    James Millar
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    An alternate entity (nominee) can transact on behalf of a taxpayer / entity provided the transaction is clearly documented as such. The concept at law distinguishes between a “beneficial owner / interest” versus a “legal / registered owner”. Much like trust law where a trustee acts on behalf of the trust / beneficiaries and not for itself.

    Failing that you could probably rely on the FBT otherwise deductible employee reimbursement rule. No FBT in that case and it effectively attributes the transaction to the business / employer entity.

    So yes it can be done.

    Helping build better businesses and better lives with expert financial and taxation advice. [email protected] www.360partners.com.au 03 9005 4900
    #1144637
    automation
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    Thank you both so much.

    Our experiences accountant wise has been poor thus far – though we are still on the hunt.

    If I know the expense is legitimate, then I can tell them to check it out… (I know, I know, they should be telling me where I am going wrong, not vice versa). Hence why I am here… I am still looking :)

    #1144638
    James Millar
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    No problem. Really any accountant worth their salt should know the actual legislation (and interpretations) rather than just to restate ATO material. Their website is very good but as a taxpayer you need to keep in mind that much of the published ATO commentary (website etc) is their opinion only. Its also written for the lay person and often takes a cookie cutter approach – not always the way the real world works. (That being said, in the majority of cases we would agree with and accept and ATO position).

    Find an accountant that knows the law and not just the ATO’s opinion. If you call the ATO and ask about “beneficial ownership and nominees” you will get a lot of questions and no answers.

    Helping build better businesses and better lives with expert financial and taxation advice. [email protected] www.360partners.com.au 03 9005 4900
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