Do not make the mistake of assuming that others know what they are looking for.

Did you hear the one about the Senate enquiry into two disappearing billiard tables?

These two tables used to be located in the parliament’s staff recreation area and when it was realised that they had disappeared a senate enquiry ensued to find out where they had gone and importantly $100,000 was spent to find the tables that had been sold for a sum total of $4,900.

How does that fit with you as a tax payer?

What this event does highlight is the fact that assets get added and disposed of every day in the property world. Sure items are removed and added with some people’s knowledge including the building managers and asset managers but more often than not this is where the information flow stops. The potential tax implications of this capital expenditure and disposal are often not considered, often missed or not maximised are events such as landlord contributions for fit outs and any reversionary depreciation opportunities.

If this information does make it to the accounts team, then often the information is incomplete or poorly described. What this means is that asset registers become large and unmanageable and there is therefore no way of clearly tracking the assets that are actually held and owned by the landlord. Overall this means that year on year depreciation diminishes in your tax schedules rather than rising and falling in line with the capex or replacement activity that naturally occurs with your assets. This exercise also makes the audit process easier across a whole portfolio basis.

A Napier & Blakeley health check focuses on your existing asset registers and tax depreciation claims. We highlight the opportunities for write-offs, reversionary depreciation, landlord contributions and even the initial basis of the depreciation claim. We do this because we know not everyone has the knowledge or even the time to do a whole asset review; we also know that in more than 80% of occasions we can significantly increase both the overall deductions available and also year by year returns.

Whilst it may have cost the tax payer over $100,000 to discover what happened to their (our) billiard tables, a Napier & Blakeley fee will be a lot cheaper yet so much more rewarding.

Finally you will always have to pay for capital expenditure and from a landlord perspective the costs of tenant incentives are always going to be around, by effectively claiming your depreciation and write-offs at least a little bit of the sting can be taken out of this expenditure.

Most accountants recognise that using a Quantity Surveyor saves time and money and puts you in the driving seat when it comes to good asset management; ask yours how they are making the most of the opportunities available to you.

Napier & Blakeley is the most relied upon Quantity Surveying firm in the matter of maximising the benefits that Tax Depreciation can provide to the bottom line, make us part of your good asset management.

Contact

Please contact us for our Property Tax data card.

Our strategic, cost effective advice will best position your property for the future.

Call Napier & Blakeley today if you want further information or regarding any other Napier & Blakeley services.

It’s here again, the end of the financial year,

Napier & Blakeley are the original experts in property depreciation deductions – we will make sure that you do muscle up and receive the maximum benefits available to you through depreciation and capital allowances.  Our experience is second to none in the market place and our track record speaks for itself.  So let us wrestle on your behalf.

It’s at this time every year that we provide an update of the legislative goings on in the accounting area of property depreciation and over the past 12 months there have been a few.

Firstly the much anticipated Green Depreciation Consultation paper was launched, Napier & Blakeley briefed on this paper when it was released in December. The paper provided allowances for “Green” related works that take a building of a 2 star NABERS rating or below to 4 star NABERS rating or above.

Essentially the scheme outlined was overly complex and did not provide any immediate relief to the tax payer, instead over burdening them with red tape. Submissions were to be provided at the beginning of the year and unsurprisingly the overall weight of submissions did not have anything favourable to say about the proposals. As a result the Government has delayed the scheme until 2012.

Other depreciation news relates to the an announcement in this years budget extending the value at which assets may be written of for small business to $5,000. There have also been some minor changes to the classification and effective lives on specific asset categories.

A major change not widely publicised is the requirement now for all Quantity Surveyors providing tax depreciation schedules including those carrying out inspections to be registered tax agents. Before this recent change there has been no requirement for a Quantity Surveyor to have any formal registration before providing a report of depreciation allowances. The tax practitioners board is yet to agreed the level of education and experience a “Suitably Qualified” individual requires to be engaged in the provision of tax depreciation schedule. Discussions on this subject are ongoing though you should be aware that all individual providers of depreciation schedules should be registered otherwise their reports may not be accepted by the ATO.

Napier & Blakeley’s main tax tip for the 2010/11 tax year is to not forget about your capital expenditure. The works that have taken place over the past 12 months can be many and varied whether it’s refurbishment of common areas or landlord owned contributions there’s almost certainly opportunities to increase the value of depreciation claim for this financial year. All too often though these costs are incorrectly treated, write off’s go unclaimed and end up living on you depreciation schedules for all eternity.

Don’t miss out on the benefits, contact Napier & Blakeley and let the industries trusted advisors help you to maximise your return this financial year.

Contact

If you want further information on tax depreciation, or any other Napier & Blakeley services please contact any of our offices below:

Melbourne - John Mathew    03 9915 6300           jmathew@napierblakeley.com

Napier & Blakeley services

• Technical Due Diligence
• Capital Expenditure Planning
• Quantity Surveying
• Strategic Asset Management
• Building & Sustainability Consulting
• Property Depreciation

Below is an example of a depreciation schedule, a client asked Napier & Blakeley to provide a health check on, with regard to the dollar value of their depreciation claims.

This property relates to a strata property purchased in a capital city CBD area, the building was a number of years old.

The numbers below are the actual figures.

Over a 5 year period, Napier & Blakeley increased this client’s depreciation claim by 45% or in cash terms based on a 30% company tax rate - the client received an additional $51,000 cash over a 5 year period. 

So is there something about this year’s depreciation claim that you should be concerned about?

Needless to say the client was very happy with the result, but there were a few grey edges to this silver lining.

Don’t forget that essentially, depreciation cannot be claimed retrospectively if you have already submitted tax returns for a tax period.

The only way of claiming any missing allowances is by re-opening past accounts. The re-opening of accounts is an exercise that very few people are willing to do, so what can you do and what else should you be looking out for.

1. Start off on the right foot; engage a specialist Quantity Surveyor with a proven track record for all acquisitions, construction projects and refurbishments.
2. Get a health check done on your existing depreciation schedules.
3. Claim the write off for demolished assets.
4. If keeping track of assets is important to you, get an asset register that relates to your depreciation schedules.
5. Claim for landlord owned fit outs.
6. Get your depreciation schedules updated annually by the Quantity Surveyor.

Most accountants recognise that using a Quantity Surveyor saves you time and money and puts you in the driving seat when it comes to good asset management; ask yours how they are making the most of the opportunities available to you.

Napier & Blakeley is the most relied upon Quantity Surveying firm in the matter of maximising the benefits that Tax Depreciation can provide to the bottom line make them part of your good asset management.

 Contact

If you want further information on tax depreciation, or any other Napier & Blakeley services please contact any of our offices below:

Melbourne - John Mathew    03 9915 6300           jmathew@napierblakeley.com

Napier & Blakeley services

• Technical Due Diligence
• Capital Expenditure Planning
• Quantity Surveying
• Strategic Asset Management
• Building & Sustainability Consulting
• Property Depreciation