Private ruling: Deductions - cost associated with concluding business
Date of advice: 25 August 2025
Published: 3 November 2025
Ruling period: Year ended 30 June 20XX | Year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Are costs paid by you after your business ceased deductible in your 20XX and 20XX income tax return? | A1: Yes. Your costs paid by you after your business ceased would be deductible as they meet the criteria in paragraph 10 of Taxation Ruling TR 2004/4 Deductions for interest incurred prior to the commencement of, or following the cessation of, relevant income earning activities .

Relevant facts and circumstances: You ran a sole trader business (the business). The business ceased trading in April 20XX. The business' income tax return was prepared on a cash basis. Since April 20XX you have been paying the ongoing lease. You also have an outstanding balance with one remaining supplier. Both the telephone lease and supplier costs related directly to the previous business. On 30 April 20XX you owed $XX to your supplier. You paid $XX in late June 20XX and will pay the balance by 31 December 20XX. The lease was present at 30 April 20XX. It was a long-term lease and is still being paid monthly. It ceases in December 20XX.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 8-1