Tax time is coming! Are you paying too much tax ?
Do you own or have you bought an investment property in the past financial year?
Or… have you recently refurbished, altered or extended your investment property in the past financial year?
Or… do you own an investment property but have never claimed depreciation in the past?
Or… own any property including commercial, retail, industrial, residential, pubs, clubs, sporting – we are experts in them all.
If your answer is yes to any of these questions then you may very well be paying too much tax on your income if you don’t claim your depreciation deductions. Continue reading
Cladding – Tax Deductions – Repair or Improve – ATO Determination
Recently the ATO has determined the replacement of ACC (Aluminium Composite Cladding), is in fact an improvement to your property and not a repair.
We have several clients who are now reviewing their ACC on their sites and discussing with their fire engineer a solution to rectify their property and make safe moving forward.
The ATO have clearly said these costs will be a capital improvement for the purpose of Division 43 of the ITAA 1997 (refer to the link further below).
In financial modelling, this means, if the new cladding installed cost $1m, you can depreciate this cost from completion of installation over the next 40 years (2.5%) which equates to a deduction of $25,000 per year, as an example.
An additional deduction may be allowed to write off the existing cladding, if the original cost and installation was completed after 1979 on hotels (40 year life), commercial, aged care, industrial buildings and similar construction which commenced after 16 September 1987 (2.5%). As we have qualified quantity surveyors registered on the Tax Practioners Board we can provide this deduction for you.
Below is the link from the ATO which provides some more clarity and discussion. Continue reading
