Disability

Viewing 7 posts - 1 through 7 (of 7 total)

Rich Far
Member
@rich-far
Join Date: 2005
Post Count: 10
March 19, 2005 - 1:29 pm
Hi,
Recently, I had a friend ask if their son(who is on a disability pension), could claim a tax refund on the interest he pays on loans for investment purposes(shares and managed funds).
Personally, I am not sure in regards to their position. I know that in general, interest paid on investment loans is tax deductible/refundable, however, because the person in question is receiving DSP, they do not pay tax.
Any help in giving my friend(their son)a solution to their question would be appreciated. There must be many who could use this advice.
Thankyou,
Rich Far
Richard Farleigh
Mortgage Hunter
Participant
@mortgage-hunter
Join Date: 2003
Post Count: 3,781
March 20, 2005 - 1:07 am
If he pays no tax then what can he claim it against?
He may find some pos cashflow properties useful?
I am impressed that he has been able to finance his properties on a disability pension! An inspriration to those who feel they have hit their limit!
Simon Macks
Finance Broker
[email protected]
0425 228 985
Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Terryw
Participant
@terryw
Join Date: 2001
Post Count: 16,213
March 20, 2005 - 2:09 am
If he had no income, he could carry forward losses until he starts making an income in the future. It would not be much use to him/her for a long time (unless he started earning a salary). But if some of his relatives had a discretionary trust setup, he could be an ideal beneificary – especially if he has accumulated a few years of losses.
Terryw
Discover Home Loans
Mortgage Broker
North Sydney
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Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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Rich Far
Member
@rich-far
Join Date: 2005
Post Count: 10
March 22, 2005 - 7:02 am
Hi,
Thankyou for replies.
I Was given the following advice…if someone on DSP chooses to have tax deducted from their DSP payments, they would then be able to claim a tax return, including a rebate for interest paid on investment loans.
Any further advice/replieswelcome
Re:Rich Far
Richard Farleigh
crj
Participant
@crj
Join Date: 2004
Post Count: 618
March 22, 2005 - 7:12 am
if he has taxable income eg from the funds, then interest he has incurred on loans to purchase those investments would normally be tax-deductible and if this exceeds the taxable income the loss could normally be carried forward
Terryw
Participant
@terryw
Join Date: 2001
Post Count: 16,213
March 22, 2005 - 7:19 am
Is a disability pension classed as taxable income? If so, then he could claim negative gearling benefits. But the amounts of tax saved would depend on how much income he is receiving – being a pension, i imagine it would be low.
Terryw
Discover Home Loans
Mortgage Broker
North Sydney
[email protected]
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email Me
Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Rich Far
Member
@rich-far
Join Date: 2005
Post Count: 10
March 23, 2005 - 1:16 pm
Hi,
The pension(disability in this case) is not classed as taxable income. However, apparently Centrelink gives the option of volunteering a self designated amount to have taken out/withheld for tax. Apparently, this amount can be as little as $5p/w and I guess the entire collective amount at end of F/Y would be refunded. A form of forced saving plan if you like.
So…relating to my earlier question, when filling out the tax refund, may this allow also for a refund claim on investment loan interest?
Thanks again…
seems a tricky topic.
Rich Far
Richard Farleigh