Commonwealth Consolidated Acts

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INCOME TAX ASSESSMENT ACT 1997 - SECT 26.85

Borrowing costs on loans to pay life insurance premiums

             (1)  You can only deduct under this Act interest on, or other expenses associated with, money you borrow to pay a premium for a * life insurance policy if:

                     (a)  the * risk component of the premium received by the insurer is the entire amount of the premium; and

                     (b)  each amount the insurer is liable to pay under the policy would be included in your assessable income if it were paid.

             (2)  The risk component of a premium for a * life insurance policy means the amount of the premium worked out on the basis specified in the regulations.



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