Shares with no dividends

Hi PC Members,

Not sure whether I am posting in the right section as I think this maybe more of an accounting question. My question is to do with tax deductibility when borrowing to invest in shares that currently do not pay dividends. My understanding until now is that you can only claim a tax deduction when borrowing to invest in shares that pay dividends.

Thanks.

 

Its on the ATO website, assets must be income producing.

 

This is a tax question. s 8-1 itaa97, interest is only deduction if there is income or an expectation of income.

 

Hi Terry,

How does it work, if I purchase stock in a company that used to pay a dividend and then stop (eg some small caps) ? There are also companies that never paid dividends that start doing so(eg Apple). There is a reasonable expectation of income but it is upto the company on whether it decides to pay out dividends to shareholders. There would also be a CG or CL event eitherway at the eventual sale in the future.

Thanks.

 

Shared with no dividends .. Oh no it's all too much, I'm feeling light headed again:

 

If there is a reasonable expectation of income then the interest would generally be deductible against income. If not part of cost base for cgt