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Tax refund or CGT Deduction

Discussion in 'Accounting & Tax' started by vtt, 30th Sep, 2015.

  1. vtt

    vtt Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    254
    Location:
    Inner West, Sydney
    Hi all,

    Would appreciate some advice on the best way to claim some painting work that we had done on what was previously an IP but is now a PPOR.

    Property was tenanted from June 2014 (settlement) until end June 2015. It was then vacant for 2 months while we did some renovation work and we moved into the property in August.

    We had some inside and outside painting done and the painter has given us a "cash price" (no receipt) and an "on the books price" (with receipt). The difference in prices is $550.

    If we pay cash then we save $550 but I assume we can't use this to offset against any CGT payable when we sell (at an unknown point in the future). If we pay the OTB price then I assume we can claim it - but my question is will it be worth it? Is the CGT saving going to be equal to or more than what we will pay?

    Thank you
    Vtt
     
  2. Paul@PFI

    Paul@PFI Tax Accounting + SMSF Business Member

    Joined:
    18th Jun, 2015
    Posts:
    2,358
    Location:
    Sydney
    Non deductible as you have no substantiation if you choose to participate in a tax avoidance scheme.
    Non-deductible if you get a receipt as it lacks the nexus to the former IP use. It has become a part of a renovation for purpose of private use.

    Yes a future CGT cost IF you have a receipt.
     
  3. vtt

    vtt Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    254
    Location:
    Inner West, Sydney
    Thanks Paul. We are going with the on the books option.

    vtt