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LAND TAX ARREARS

Can I claim a deduction for land tax arrears in the income tax year in which the arrears where paid ?

No you must amend prior year returns if you want to make a claim for land tax assessed in a current year for previous years.

Refer to ATO ID 2010/192

SUPER

Can a Non Resident Make a Contribution to Super and Claim a Deduction ?

Some non residents have positive rental income and want to make a contribution to superannuation and claim a deduction to minimise their overall tax position. Where the non resident provides a valid notice of intent to claim the deduction to the Fund and the Fund acknowledges receipt of this notice, the deduction is not more than the amount covered by the notice and the deduction does not create or increase a loss to be carried forward the taxpayer will satisfy all the required conditions to claim a deduction. The tax act requires that if a taxpayer is engaged in any activities that results in them being treated as an employee for the purposes of the Superannuation Guarantee (Administration) Act 1992 (SGAA 1992), to deduct a contribution, less than 10% of the total of the following must be attributable to those activities: ● their assessable income for the income year; ● their reportable fringe benefits (RFB) total for the income year; ● the total of their reportable employer superannuation contributions (RESC) for the income year. In regards to the maximum earning as an employee condition TR 2010/1 states at paragraph 65: “In the application of the maximum earnings test, the relevant ’employment’ activity need not be an activity in Australia. For a non-resident, the income attributable to employment outside Australia is not assessable income in Australia and so will not be counted in the maximum earnings test.” If the only Australian income is rental income then this test would be satisified. This can be a useful strategy where the non-resident wants to minimise their overall tax position as non residents do not receive the tax free threshold.

GENERAL DEDUCTIONS

Are Buyers Agents Fees Tax Deductible ?

Some non residents have positive rental income and want to make a contribution to superannuation and claim a deduction to minimise their overall tax position. Where the non resident provides a valid notice of intent to claim the deduction to the Fund and the Fund acknowledges receipt of this notice, the deduction is not more than the amount covered by the notice and the deduction does not create or increase a loss to be carried forward the taxpayer will satisfy all the required conditions to claim a deduction. The tax act requires that if a taxpayer is engaged in any activities that results in them being treated as an employee for the purposes of the Superannuation Guarantee (Administration) Act 1992 (SGAA 1992), to deduct a contribution, less than 10% of the total of the following must be attributable to those activities: ● their assessable income for the income year; ● their reportable fringe benefits (RFB) total for the income year; ● the total of their reportable employer superannuation contributions (RESC) for the income year. In regards to the maximum earning as an employee condition TR 2010/1 states at paragraph 65: “In the application of the maximum earnings test, the relevant ’employment’ activity need not be an activity in Australia. For a non-resident, the income attributable to employment outside Australia is not assessable income in Australia and so will not be counted in the maximum earnings test.” If the only Australian income is rental income then this test would be satisified. This can be a useful strategy where the non-resident wants to minimise their overall tax position as non residents do not receive the tax free threshold.

INTEREST DEDUCTIONS

Can you claim a deduction for 100% of the interest incurred on an investment loan held in joint names where the title of the investment property is in your name only?

Yes you can. Taxation Ruling TR 93/32 considers the division of net income or loss between co-owners of a rental property. TR 93/32 states that net income or loss from a rental property must be shared according to the legal interest of the owners, except in those very limited circumstances where there is sufficient evidence to establish that the equitable interest is different from the legal title. Legal interest is determined by the legal title to a property. TR 93/32 states that where the title deed of a rental property indicates sole ownership of the property, and the mortgage is held in joint names, the legal owner can claim the full amount of the interest paid. In example 5 of the ruling it states “ The fact that Mr Z has paid all the expenses on the property is of no consequence for income tax purposes. We would simply treat the payment of Mrs Z’s share of the expenses by Mr Z as no more than a loan by Mr Z to Mrs Z.

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