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Claiming travel expenses

Discussion in 'Accounting & Tax' started by B-Mac, 20th Jul, 2015.

  1. B-Mac

    B-Mac Well-Known Member

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    If i traveled to melbourne last FY to inspect 3 properties, talk to real estate agents etc, however, didn't end up buying anything do the standard travel deductions still apply?

    My sole purpose for the trip was for investment, i went alone and have receipts for all expenses.
     
  2. Propertunity

    Propertunity Exclusive Real Estate Buyers Agent Business Member

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    You can only claim travel for visits to properties you already own. In your scenario, you get $0 as you only went to inspect with the intention of buying.......sorry you get nothing.:(
     
    EN710 likes this.
  3. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Yes no deduction possible. Unless perhaps you are in the business of property.
     
  4. MikeLivingTheDream

    MikeLivingTheDream BCOM MCOM MTAX CPA CTA Registered Tax Agent

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    and cant be added to the cost base
     
  5. meme plecko

    meme plecko Well-Known Member

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    I have travelled to inspect the property a couple of days after the contract was signed (bought site unseen). Are these travel expenses deductible?
     
  6. smator

    smator Well-Known Member

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    What type of evidence do you need for when you inspect your property?
     
  7. Propertunity

    Propertunity Exclusive Real Estate Buyers Agent Business Member

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    An email trail with the managing agent would be a good start to establish the reason for going. After this, travel & accom expenses backed up by copies of invoices and a vehicle log book if claiming per klm rate would be good. Even a diary note supporting all the above is what I'd do.
     
  8. Pins

    Pins Well-Known Member

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    This month in YIP magazine their tax expert said that you can't claim flights only car hire etc in the location. Does anyone else know if this is true?
     
  9. Ed Barton

    Ed Barton Well-Known Member

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    What's the purpose of the visit?
     
  10. Pins

    Pins Well-Known Member

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    To lease apartment / let in tenant
     
  11. Pins

    Pins Well-Known Member

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    Whoops hit post too early

    I let apartment directly ie no agent
     
  12. Ed Barton

    Ed Barton Well-Known Member

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    If the purpose of the trip is to lease (eg hold opens, clean, do maintenance) your IP then flights would normally be deductible.

    As always get your own professional advice for your circumstances.
     
  13. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Don't believe what you see in those magazines!
     
  14. Paul@PFI

    Paul@PFI Tax Accounting + SMSF Business Member

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    The mag may have explained that if you are travelling to say the Gold Coast for a family holiday and decide to attend the IP meet agent etc for a day then yes its likely the travel costs is a holiday and the purpose for travel by air is private. No deduction may be available other than say the hire of a car for a day etc.

    I worked in a practice with lots of teacher clients a while back. We also used to see claims for HSC history study tours etc. The ATO view was quite clear - If the employer did not allow the employee fully paid leave during working terms to attend then the travel cost was not deductible at all. And they needed a diary that indicated the itinerary...Stop off on the way back could affect a % of deductions as an example. Another positive was where the employer partly subsidised the trip by allocating approved leave and partly paid fares etc. This is often seen by Catholic teachers doing holy land etc trips as a group - ie Principals. Its imperative there is an approved trip / leave etc. If the employee takes the trip in (paid) holidays it likely non-deductible. (These are highly simplified examples)

    This "nexus" which aligns a cost with the travel purpose occurs with IP owners too. I generally recommend that a sole and exclusive trip is taken to attend to an existing IP and its management. Trips on or after settlement to attend to income producing activities need to be limited and a longer trip to clean the place up and do initial repairs can harm a deduction. Travel should be ideally limited to same or next day return. The longer the travel the bigger the problem. The need to maintain a travel diary is also essential in many cases.