Deductions cannot be claimed for rent, mortgage interest, rates and land tax for a residence, where those expenses relate to a person's PSI.

Example: deductions not claimable under PSI rules

Sam has recently set up a business called Sam's Financial Services, where Sam provides financial advice and completes tax-related forms including business activity statements and tax returns. Sam operates this business from one of the rooms in her house.

All of the income generated is PSI as most of the income relates to Sam's skills, knowledge and expertise. Sam has self-assessed that the business does not meet any of the PSB tests, and therefore the PSI rules apply to that income.

Since the PSI rules apply, Sam cannot claim rent, mortgage interest, rates or land tax relating to her residence.