How Many Tax Deductible Flights ?

Hi There,

I understand that you are able to claim for travelling (flights etc)to see an IP but there seems to be a grey area around how many flights you can take in one tax year.

For example, if I lived in Sydney and had 4 IPs in Melbourne, how many trips to Melbourne would be acceptable in one year ?

I someone can give me some advice it would be greatly appreciated.

Thanks

PIppety:)
 
Originally posted by PIppety
Hi There,

I understand that you are able to claim for travelling (flights etc)to see an IP but there seems to be a grey area around how many flights you can take in one tax year.

For example, if I lived in Sydney and had 4 IPs in Melbourne, how many trips to Melbourne would be acceptable in one year ?

I someone can give me some advice it would be greatly appreciated.
Thanks
PIppety:)

Hi

There is no limit as the tax office are aware that as soon as they set one, we will all abuse it . . . the rules are basically that you can claim as many trips as you make providing you can prove the claim with receipts, and, justify the trip. My rule of thumb is claim as much as you can without being greedy.

I'm sorry I can't be of any more help.

Dale
 
Hi PIppety,

I personally think you arent pushing the envelope hard enough (Sorry Dale if I errr...)

With 4 I.P.s, I couldnt see a problem claiming the costs of 2 flights per year per property, which equates to an inspection on each property every 6 months. R.E. agents can inspect every 3 months, so who is to say the owner cannot inspect twice a year?

Hopefully this helps. Again, the tax office is liable to use their own criteria, and I respectfully defer to Dale once more, but I say go for broke!!!

Just make sure you have the means to substantiate both the purpose of the trip, and its cost to you...

Regards,

Jamie.
 
Hi All,

Just read again and have a question,

Dale, what is involved in persuading the Tax Office that a certain amount of travel is necessary, and not excessive? Do you know any instances of the Tax Office refusing claims which you would personally have thought of as legit?

Jamie
 
G'Day Dale,

Since we are on the subject of tax deductable flights, I am hoping(wishing, dreaming) of investigating options of purchasing investment properties in the following locations in the next 12 months.......Vanuatu, New Caladonia, the French Riviera, the Greek Islands and maybe even one or two near Disneyland.

Now my question is assuming that I were to fly to these destinations and stay there in lets say, mid range accomodation, for periods of two weeks in each location and further assuming that after exhaustive investigation, no suitable properties were found or purchased, would these trips be 100% tax deductable.

Also, would your answer be any different if I was to take along, lets say an accountant with the initials of DGG, for professional advice while at these locations.

regards
 
Hi Jakk,

You dont need any other (lowly) minions to help in your explorations, do you? I am great at taking notes, and I already have my scuba diving ticket (for underwater conferences...)

Yours in coastal anticipation,

Jamie.
 
Originally posted by Jakk
G'Day Dale,

Since we are on the subject of tax deductable flights, I am hoping(wishing, dreaming) of investigating options of purchasing investment properties in the following locations in the next 12 months.......Vanuatu, New Caladonia, the French Riviera, the Greek Islands and maybe even one or two near Disneyland.

Now my question is assuming that I were to fly to these destinations and stay there in lets say, mid range accomodation, for periods of two weeks in each location and further assuming that after exhaustive investigation, no suitable properties were found or purchased, would these trips be 100% tax deductable.

Also, would your answer be any different if I was to take along, lets say an accountant with the initials of DGG, for professional advice while at these locations.

regards

Jakk,

Check out the ato guide on http://www.ato.gov.au/content.asp?doc=/content/Individuals/9033.htm&page=11#H10 (this was the 2001 guide- but I could not imagine they would be more lenient now).

Point 1. If you travel to a property, spend one day inspecting it, and two weeks on holdiay, then you cannout claim the air fare. You may only claim ground expenses on the day.

Point 2. It used to be the case that You could only claim deductions from an O/S investment against O/S income. You could not claim it against Australian income. Although, at that stage at least, you could claim expeses from one investment against income from another investment in another country (apart from Oz).
 
Having thrown buckets of water on Jakk's dream of escpaing the slums, let me pose another scenario.

What if you were running real estate through a company (especially if it was a profitable venture).

Would the company then be able to do things like send you to your property in Noumea or Fiji?

I have a friend who tells me the company buys a lot of things which are business related. You might need a new suit for a business meeting- the company buys it for you. Perhaps a smart looking watch- it creates a good business impression. And that flight to the US? Developing business ideas and contacts.

Another friend is employed by his own Australian company in England. The company pays for the accomodation, childrens' private schooling, and the like.

To me, some of this sounds as if it's really pushing the square a bit much.

Dale- any thoughts?
 
Originally posted by Jamie
Hi PIppety,

Just make sure you have the means to substantiate both the purpose of the trip, and its cost to you...
Regards,
Jamie.

Hi

I agree. But not only receipts, I would also keep file notes of why I attended each property and what i did at the time. remember, the tax office are likely to be skeptical of you wishing to claim holidays as tax deductions and so it is up to you to prove why you are there.

I suggest notes on what you did, who you met (I'm in Melb and so you could always say you dropped in on me for a chat and some advice) and any action taken.

This all builds your defence for when the tax office ask questions.

I hope that this helps

Dale
 
Originally posted by Jamie
Hi All,

Just read again and have a question,

Dale, what is involved in persuading the Tax Office that a certain amount of travel is necessary, and not excessive? Do you know any instances of the Tax Office refusing claims which you would personally have thought of as legit?

Jamie

Hi

I have never had a problem with the tax office, but, i am aware that others have . .. I normally suggest more information than less. For example, if you wanted your boss to pay to reimburse you for certain expenses, you would have to sunmit a claim no doubt. In doing so, you would need to provide receipts and perhaps explain what you did and how you incurred those expenses on his or her behalf. The tax office is the same.

You will want to be able to explain why you took the trip, what you did whilst you were there, and provide the receipts involved.

Don't be too greedy and be smart about the whole thing.

Dale
 
Originally posted by Jakk
G'Day Dale,

Since we are on the subject of tax deductable flights, I am hoping(wishing, dreaming) of investigating options of purchasing investment properties in the following locations in the next 12 months.......Vanuatu, New Caladonia, the French Riviera, the Greek Islands and maybe even one or two near Disneyland.

Now my question is assuming that I were to fly to these destinations and stay there in lets say, mid range accomodation, for periods of two weeks in each location and further assuming that after exhaustive investigation, no suitable properties were found or purchased, would these trips be 100% tax deductable.

Also, would your answer be any different if I was to take along, lets say an accountant with the initials of DGG, for professional advice while at these locations.

regards

Hiya Jakk!

Not only would my advice be different, I would prepare the paperwork foryou to ensure that we could claim all expenses involved including the alcohol needed to sustain such a trip!!!

Obviously, the tax office are skeptical about overseas trips. therefore, to get away with sucha claim, you would need to be able to provide receipts and I would also be looking for an itinerary of what you wanted to achieve whilst you were away and a report of what you found which is prepared after you return.

Treat this as a business report and pretend that you are reporting to the boss on what you achieved.

Yes, as a business involved in the property industry this is so much easier to justify and therefore claim.

Have fun

Dale
Now where is the application for a passport???
 
Originally posted by geoffw
Having thrown buckets of water on Jakk's dream of escpaing the slums, let me pose another scenario.

What if you were running real estate through a company (especially if it was a profitable venture).

Would the company then be able to do things like send you to your property in Noumea or Fiji?

I have a friend who tells me the company buys a lot of things which are business related. You might need a new suit for a business meeting- the company buys it for you. Perhaps a smart looking watch- it creates a good business impression. And that flight to the US? Developing business ideas and contacts.

Another friend is employed by his own Australian company in England. The company pays for the accomodation, childrens' private schooling, and the like.

To me, some of this sounds as if it's really pushing the square a bit much.

Dale- any thoughts?

Hiya Geoff!

yes, running a property business througha company or trust does allow you to claim much more than normal. For example, as a trust (I know that you have one from previous comments on this forum) you can claim expenses involved in research financing techniques; acquisition techniques; and all sorts of property related activities without even having to look at buying a property overseas.

It's magical, isn't it?!!?

Have fun

Dale
 
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