Can you deduct handling fees on shares?

David Warneke

29 June 2010

David Warneke considers if you can.

Dear MoneywebTax

I own a few shares in McDonalds and the (very small) dollar dividend I receive is paid quarterly. It is transmitted to my bank account in rands but Computershare in America deduct ten dollars from each payment in handling fees. Can I deduct these charges when I submit my tax return so that I only declare the net dividend actually received? Your help will be much appreciated.

Answer from Cameron & Prentice's David Warneke
Unfortunately you may not deduct the handling fees. Since you do not conduct a trade in the shares, you may not deduct any expenses in the production of the foreign dividends other than interest on money borrowed to finance the purchase of the shares. The deduction of interest under these circumstances is specifically sanctioned by a provision in the Income Tax Act - section 11C.

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