deductions for travel?

I understand the ATO rules regarding deducting travel expenses have changed. Does that mean I can no longer claim travel to my IP for things like inspections, repairs, showing prospective tenants through?

EDIT: never mind I see from another thread that these deductions are no longer allowed.

 

Yes

And the ATO doesn't make the rules it is the law that has changed

 

For a residential IP = no travel, no meals, no fares, not even to perform repairs etc. Any costs you incur can be disregarded and the receipts thrown away. They dont impact tax in any way after 30 June 2017

 

You can, if it's for a commercial property. If it's residential then it's a no.

 

Maybe it is time for residential landlords to own some commercial property!

 

Nah! Way too complex for the masses.

 

This law also does not apply to company owners (but not if acting as trustee)

 

a company can hold residential property and can claim travel deductions.

 

It is s26-31 ITAA97. I mentioned it in a podcast episode that I recorded today.

Doesn't apply to company owners, but applies to trustees. A company owning residential land as trustee of a discretionary trust will mean the travel deductions are not available but a company owning land in its own right can claim travel relating to holding the residential property.

 

This section doesn't apply to commercial property
INCOME TAX ASSESSMENT ACT 1997 - SECT 26.31 Travel related to use of residential premises as residential accommodation

 

Travel to / from commercial property needs to consider some factors
1. Was the travel related to a capital or revenue purpose ?. eg May add to costbase and not be deductible.
2. If owned by a entity how did the entity incur travel expenses ? The entity cant claim costs incurred by a Director as such. But it might reimburse them and then satisfy this. Car deductions will be a issue if the entity doesnt own a car.
3. If owned personally which owner/s incurred the travel costs ? eg a car. It may be a personal deduction for one owner and not shared.

 

the issue that arises with an entity is how was the travelled incurred which opens up a whole host of other issues

 

Could the director of the company use their own vehicle and then be reimbursed by the company for the kms travelled?

 

Yes. Or receive a allowance in broader situations. Then they may have an assessable allowance and a offsetting deduction.

 

This is interesting topic

If you have residential property in SMSF under company e.g.:-
Abc pty . Ltd. (Acn xxxxxxxx) as trustee for def smsf fund (abn xxxxxxxxxxx)

Can you claim travel/inspection etc... As its holding under company name?

 

but it isnt held under a company. an smsf is a trust.

 

Travel is not claimable by SMSFs

 

The company is a CUSTODIAN trustee. It holds the property under bare trust for a SMSF. "You" dont have a SMSF property. The fund does.
SMSFs are also barred from claiming travel deductions and the payment could even be a audit concern. I am sometimes asked if a SMSF can claim travel costs for commercial property. NO. The entity is prohibited. There is no need to consider property type.

Entities that can claim travel expenses
You can claim travel expenses, if you're a:

• corporate tax entity
• superannuation plan that is not a self-managed superannuation fund
• public unit trust
• managed investment trust
• unit trust or a partnership, where all of the members are entities of a type listed above.