Deductibility of Interest on Subordinated Debt

In an earlier Tax Brief [available at http://www.gf.com.au/477_634.htm] we reported on a case denying St George Bank a deduction for interest paid on a subordinated loan issue.  The Full Federal Court recently heard the taxpayer’s appeal in this case and unanimously confirmed that the interest expense was not deductible.  In this Tax Brief we review the Court’s reasoning and the ongoing significance of this case.  For our full Tax Brief - click here