Claim travel expenses to visit I.P

[parra1]

Hello,


I have an investment property in Adelaide. I live in Sydney. It is a DHA property and I have had some issues with it. I want to go down and inspect the work done. DHA have rules that inspections are pre booked in advance etc. I am looking at something like this :

Friday - Fly Sydney to Adelaide ( wife & I )
Hire a car and drive to inspect property and meet with DHA
Overnight accommodation in Adelaide
Saturday Return Flights to Sydney.

I understand that almost 100% of that trip above would be tax deductable due to it being the MAIN PURPOSE of attending Adelaide.

If I added two extra nights accommodation is that considered reasonable or private travel. Might stay extra few nights away from kids.

Any suggestions what is the best way to go about this. I can break the first part up totally as scenario 1 and pay for the extra two nights myself. I will have evidence of inspection, travel ( plan tickets ) accomodation, taxi or Hire Car , meals on that day ....

Never taken advantage of this with all my properties.

Advice is greatly appreciated.

 

[Asheam]

Hi Parra

If you were to stay just for the one night I would be comfortable claiming 100% of the trip expenses as a deduction.

My view is that if you were staying an additional two nights you would have to apportion the air fares between business and private and then only claim the night's accommodation and expenses for the day.

As the majority of the trip is not for your IP then you would be hard pressed to claim the full fares.

Is the IP held in both of your names or yours solely? If only yours do you believe that your wife's airfares would be deductible as well?

Cheers

 

[parra1]

Hi Asheam,


No property is in my name only. If I seperated the invoices for the extra two nights and paid that myself would that be sufficient.

 

[The Y-man]

If I added two extra nights accommodation is that considered reasonable or private travel. Might stay extra few nights away from kids.

Needs to apportion - 1/3 to "business" balance 2/3 private for the total costs.

May also need to explian why you need to spend the night there rather than fly back same day.

The Y-man

 

[Paul@PFI]

Y Man raises a valid point. If you are staying for an extra 2 days is the first nght accom incidental to that purpose rather than the rental purposes which you could have gone straight home from ?? I would schedule your meeting later to avoid that concern. I doubt ATO would quibble over that anyway. They would expect ALL travel costs to be apportioned.

A client last year was asked something similiar. ATO asked very detailed questions regarding the underlying purpose and why something that required discussion needed airfares, accom and carhire. They accepted after discussion and review that the travel was to inspect major issues with the property and to consider a program to address repairs and improvements. Photo's taken on the day were well received ! This took sometime and the flight schedule for arrival, travel to/from prop and to agents + return werent conducive to same day.

They also reviewed the repairs and improvement costs for that year obviously concerned some "repairs" were improvements and capital in nature after seeing photo's.

ATO rarely just focus on one rental cost. They tend to send a checklist and seek broad info and then initiate a brief phone discussion. Its usually a fairly junior role. If they detect issues (ie no receipts) it gets escalated as an audit review rather than desk review.

 

[bumskins]

I agree with others, you would need a strong case for not going back the first night otherwise it would be considered a personal expense also.

I believe also that if the business cost becomes incidental to the purpose of the trip it makes it hard to make much of a claim for the flights, etc. e.g. it could end up being viewed that you went down on a holiday and then spent a couple of hours doing business (1 hour inspection, 1 hour travel) with the rest of the time being personal.