Income/expenses used for which financial year?

[vbplease]

Hi guys,
I thought I'd double check that the income/expenses used when doing ones tax return relate to the year they were received or paid?

For example June 09 rent wasn't received until July 1st - so I claim this in 09/10? Also an expense such as landlord's insurance was paid (by the pm) in June 09, so it's included in 08/09?

I've just gone over my PM's yearly statement, and he hasn't considered when the monies were actually paid or received

 

[jrc]

When you say received do you mean received by the PM or received by you from the PM into your bank account?

I would normally consider that if the PM had received the rent but not paid me that as the PM is my agent he has received the money for me and it would be considered as received when the PM received it as I would be entitled to ask for it.

If the insurance premium was paid in June even though it is for the following year claim it. If you are paying more than a certain period ahead (13 months rings a bell), then it might be a different answer.

 

[vbplease]

I would normally consider that if the PM had received the rent but not paid me that as the PM is my agent he has received the money for me and it would be considered as received when the PM received it as I would be entitled to ask for it.

Thanks jrc, that makes sense.. my pm also confirmed that the income/expenses were included in the relevant financial years.

 

[babushka]

Hi guys,
I thought I'd double check that the income/expenses used when doing ones tax return relate to the year they were received or paid?

For example June 09 rent wasn't received until July 1st - so I claim this in 09/10? Also an expense such as landlord's insurance was paid (by the pm) in June 09, so it's included in 08/09?

I've just gone over my PM's yearly statement, and he hasn't considered when the monies were actually paid or received

I have had a similar situation, rent for June 09 paid by property mananger into my account on 1st July. My accountant said the rent income would go into tax year 08/09, as the cash was considered to be "in transit".

 

[Mry]

Your property manager acts as your agent. When they get the money, you are deemed to have received the money.

 

[Rob G.]

Your property manager acts as your agent. When they get the money, you are deemed to have received the money.

s.6-5(4) ITAA97

Cheers,

Rob