Disbursement , Can You Claim
- Thread starter Emily_Zac
- Start date
I can't see why you wouldn't claim them. These are claimable costs when you already own the property.
Exactly....I claim them. All that has happened is they have been adjusted for settlement purposes and you have paid them at time of settlement instead of when they usually fall due.
Last edited:
Fresh back from the accnt.- disbursments (ie. water, rates, strata, emerg. serv. fund, etc.) at settlement form part of the COST BASE, along with building insp. report, searches and disbursements, regn. of transfer, conveyancing fee, stamp duty and purchase price.
BORROWING COSTS are strictly loan costs ie. loan estab. fees.
I thought the searches and disbursements, registration of transfer along with the loan estab. fees were all part of the borrowing costs...apparently not.
Hope this helps.
BORROWING COSTS are strictly loan costs ie. loan estab. fees.
I thought the searches and disbursements, registration of transfer along with the loan estab. fees were all part of the borrowing costs...apparently not.
Hope this helps.
Intresting I was almost sure they would be claimable in year incurred , oh well
Thnaks very much for letting me know
Martin
I think your accountant is wrong.
I will be claiming my council rates paid on settlement for a block of land which I'm building an IP on. The ATO is quite clear on it's website that council rates can be claimed when building an IP and they don't say anything about not being able to claim those costs paid at settlement, so I feel that I'm pretty well protected against paying penalties even if during an audit the ATO decided I couldn't claim it. As long as the rates paid are for the period when you owned it (eg not payment of overdue rates for last year that the previous owner did not pay), and you intend to rent out the property ASAP I don't see why there would be a problem.
Here is a private ruling where the ATO have said the council rates incurred at settlement are claimable;
http://www.ato.gov.au/rba/content.asp?doc=/RBA/Content/41556.htm
I will be claiming my council rates paid on settlement for a block of land which I'm building an IP on. The ATO is quite clear on it's website that council rates can be claimed when building an IP and they don't say anything about not being able to claim those costs paid at settlement, so I feel that I'm pretty well protected against paying penalties even if during an audit the ATO decided I couldn't claim it. As long as the rates paid are for the period when you owned it (eg not payment of overdue rates for last year that the previous owner did not pay), and you intend to rent out the property ASAP I don't see why there would be a problem.
Here is a private ruling where the ATO have said the council rates incurred at settlement are claimable;
http://www.ato.gov.au/rba/content.asp?doc=/RBA/Content/41556.htm
This one has been bugging me for days! I remember reading somewhere when we bought out first IP that rates, water rates, and body corporate fees which are adjusted at settlement are deductible. We have certainly been claiming them. And with the concurrence of our accountant.
Have finally found the reference:
" ... the reimbursement is on account of revenue, not on account of capital, and is made in gaining assessable income consisting of the rents."
The case in question is FCT v Morgan (1961) 106 CLR 517.
http://law.ato.gov.au/atolaw/view.htm?DocID=JUD/106CLR517/00002
There may have been subsequent changes in the law which render this decision obsolete, but I am not aware of any. Perhaps one of our accountants could comment on this?
Cheers
LynnH
My understanding is also against it being non deductible.
"Disbursements" that are incidental costs of acquisition of a capital asset itself form part the cost base.
"Adjustments" that represent apportioning of rates and taxes might be tax deductible to the buyer.
Note that if the vendor also claimed prepaid rates and taxes then this will be an assessable recoupment to them as well.
This is often missed as you usually only get one cheque without a detailed breakdown.
Cheers,
Rob
"Adjustments" that represent apportioning of rates and taxes might be tax deductible to the buyer.
Note that if the vendor also claimed prepaid rates and taxes then this will be an assessable recoupment to them as well.
This is often missed as you usually only get one cheque without a detailed breakdown.
Cheers,
Rob
Similar threads
