Join Australia's most dynamic and respected property investment community

How would you treat this in your tax?

Discussion in 'Accounting & Tax' started by MKB, 27th Oct, 2015.

  1. MKB

    MKB New Member

    Joined:
    27th Oct, 2015
    Posts:
    4
    Location:
    Melbourne
    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!
     
  2. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

    Joined:
    18th Jun, 2015
    Posts:
    9,033
    Location:
    Sydney
    You can only claim expenses you incur.

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

    D.T. Adelaide Property Manager Business Member

    Joined:
    13th Jun, 2015
    Posts:
    5,596
    Location:
    Adelaide, SA
    You risk your CGT free status
     
  4. MKB

    MKB New Member

    Joined:
    27th Oct, 2015
    Posts:
    4
    Location:
    Melbourne
    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!
     
  5. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

    Joined:
    18th Jun, 2015
    Posts:
    9,033
    Location:
    Sydney
    Is your business a separate entity?
     
  6. MKB

    MKB New Member

    Joined:
    27th Oct, 2015
    Posts:
    4
    Location:
    Melbourne
    No, sole trader.
     
  7. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

    Joined:
    18th Jun, 2015
    Posts:
    9,033
    Location:
    Sydney
    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?
     
  8. Greyghost

    Greyghost Well-Known Member

    Joined:
    23rd Jun, 2015
    Posts:
    1,262
    Location:
    Melbourne
    Only if they are occupancy expenses such as rates & interest.

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

    Greyghost Well-Known Member

    Joined:
    23rd Jun, 2015
    Posts:
    1,262
    Location:
    Melbourne
    I would just claim the home office cents per hour stat rate....
     
  10. MKB

    MKB New Member

    Joined:
    27th Oct, 2015
    Posts:
    4
    Location:
    Melbourne
    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...