How would you treat this in your tax?

I'm own a small business (sole trader) operating from home. Home is in joint names, business in mine only. Are the occupancy deductions split as for a rental property or claimed only by me as the business owner? Thanks in advance for your help!

 

You can only claim expenses you incur.

Whether you can claim occupancy deductions will depend on the circumstances.

 

You risk your CGT free status

 

Thanks both.

I am quite confident that I can claim occupancy and understand that there will be an impact for CGT. Just not sure of the mechanics of claiming?

With our rental properties we split both income and deductions 50/50 due to joint ownership. My business occupies about 1/3 of our home, so joint ownership of property occupied, but single ownership of business. The two scenarios we see are that we split the occupancy deductions between us (as with a rental), or that I should be the only one deducting (as a business expense).

Any ideas?

Thanks again!

 

Is your business a separate entity?

 

No, sole trader.

 

I am not sure of the answer but would think you could just claim on floor area basis disregarding the joint tenancy - maybe one of the accountants would know?

 

Only if they are occupancy expenses such as rates & interest.

Gas & electricity costs should be fine as they are utilities.

 

I would just claim the home office cents per hour stat rate....

 

My research says that the CGT issue remains whether the interest and rates are claimed or not, it is the fact that the property has been used to generate income that causes the problem with the CGT exemption. So we may as well claim what we are entitled to. Just whether it's "we" or "me" that has a claim...