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So the question remains, can I rely on the precedent set by the Arthur Murray case? I feel like I can, but I'd love to get a straight out and clear resounding yes from a tax law specialist so I don't end up having to pay much more tax than required!
130. The rent should be brought to account over the period for which the payment is made, in accordance with the Arthur Murray principle.F31 This was the approach adopted by the Taxation Board of Review in Case B47, 70 ATC 236.
However, the taxpayer should be deemed to have derived assessable income week by week at the rate of ?25 per week in the form of rent which accrued to him from 1 March 1965 to 30 June 1965 under the terms of the lease agreement of 31 March 1965. `
Excellent stuff!
This TR concerns a retirement village operator receiving lump sum payments for rent upfront.
Aside from the tax stuff, I'd be concerned the tenant is trying to hide something in their applications by sweetening it so much. Are you sure you checked everything? What's their reason for wanting to pay that?
I spoke with tax accountants today and they said if I was a real estate agent I could prorate the payment. But as this is not my main source of income, I'd have to declare it when I receive it. So I've arranged for the tenant to pay me the first 6 weeks of rent now, the remainder at the beginning of July.