Seminars

From: Geoff Whitfield


Hi,

Somebody posted a link to do with deductibility of seminars. I can't find the original thread, but I thought it worth while to post again anyway:

http://ato.gov.au/rba/content.asp?doc=/rba/content/14120.htm

My reading of what this is saying is, that if you have gone to a seminar (or, perhaps by implication, bought books/software/whatever) then you can't claim the cost of the seminar against your income tax- unless you are in the "business" of renting out houses. The seminars are to be regarded as a capital expense, and as such, only claimable against CGT when a property is sold.

What is a "business" is not quite clear. In the ruling given, one rental property is definitely not a business (I had previously thought that having one rental property might be enough to claim the cost of a seminar).

This does also seem contrary to advice which has been given by members of this forum, and by my own accountant.

Does this really mean that ATO are losing too much from seminar deductions and are changing (sorry, "clarifying") the rules?

This is only a private ruling, but seems to indicate a new direction.

Geoff
 
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Reply: 1
From: Dale Gatherum-Goss


Hi Geoff

I was aware that the tax office have started to take look closely at investment seminars because there are so many of them now and as a result of a loss of revenue to the Government.

That was very interesting reading, thank you.

If I may go out on a limb here . . . the tax office seems to only answer the question put to them about whether the investment seminar was a "general tax deduction"

They did not consider (and perhaps for their own reasons)whether the investment was tax deductible under the "tax related" deductions of the ITAA.

I suspect that we will hear more about this soon enough though and I believe they are preparing to look a lot closer at some of these deductions - and especially those very large amounts that some of the seminars have cost.

Thanks Geoff and have fun

Dale
 
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Reply: 1.1
From: Geoff Whitfield


Dale,

Thank you for that.

Interesting point about being 'tax deductible under the "tax related" deductions of the ITAA'.

What do you mean by that in layman's terms?

And do the implications go further than just seminars (eg, books, manuals, software)?

Geoff
 
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Reply: 1.1.1
From: Dale Gatherum-Goss


Hiya Geoff!

Sorry, what that means is that the tax office took a one dimensional view of the cost in terms of being allowed as a legitimate tax deduction.

However, some expenses can be claimed under a number of different sections of the tax act and I suspect that a decent argument might be brought forward to claim seminar expenses under other sections of the tax act such as "tax related" expenses under Section 25-25 of the 1997 tax act.

What does all this mean?

It means that the tax office private ruling is NOT comprehensive and it may well be self serving rather than an accurate picture of what is, or is not, tax deductible in this regard.

It should also go to show that the tax office rulings are not to be relied upon without further thought or consideration. They are not always right.

Books, and other expenses incurred in managing your investments are, I believe, tax deductible. Seminars might be tax deductible depending upon the issues covered.

I believe that we have not heard the last of this issue and that we may well see more

As an old chinese saying goes. "May you live in interesting times" certainly applies to tax!!!

Have fun

Dale
 
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Reply: 1.1.1.1
From: Geoff Whitfield


Thanks Dale.

So this is all open ended I guess.

I did check out the newsagent's copy of the Tax Guide (I didn't buy it because I wasn't sure if it was deductible). On the matter of self-education, it does specifically exclude self-education for the purpose of changing profession/trade.

If such fees are deductible under another section of the Act, I would have to provide my accountant with more proof.

I was much more afraid, that my Spann seminar 2 years ago ($3K) would not only be disallowed in retrospect, but that I could be fined and charged exorbitant interest (as with tea tree investments). The information I have been given is, that even if the ATO ruling stands, it is in respect to the 2000/01 tax year.

BTW, that seminar has led me to purchasing (cash +ve as it turns out) property which will be earning ATO far in excess of the fees paid for the seminar. So I'm not upset even if I don't get the deduction allowed. I will be extremely upset if I get fined again for something I did on good faith with good advice.

Geoff
 
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Reply: 1.1.1.1.1
From: Dale Gatherum-Goss


Hi Geoff!



>So this is all open ended I
>guess.


I am afraid that all tax issues are open ended and this is indicative of how ludicrous our tax system really is.


>I did check out the
>newsagent's copy of the Tax
>Guide (I didn't buy it because
>I wasn't sure if it was
>deductible). On the matter of
>self-education, it does
>specifically exclude
>self-education for the purpose
>of changing profession/trade.


Ah, but that just deal with "work related expenses" and not with investment related expenses, or, with tax related expenses.


>If such fees are deductible
>under another section of the
>Act, I would have to provide
>my accountant with more proof.
>

Funny, I would have liked to have seen your accountant provide you with advice as to YES or NO and why. You should not have to provide proof to him or her. . . After all, that is their job and why you go to an accountant.


>I was much more afraid, that
>my Spann seminar 2 years ago
>($3K) would not only be
>disallowed in retrospect, but
>that I could be fined and
>charged exorbitant interest
>(as with tea tree
>investments). The information
>I have been given is, that
>even if the ATO ruling stands,
>it is in respect to the
>2000/01 tax year.


Sadly, yes, this is always a possibility given how unjust our tax system is. You are guilty until you prove yourself innocent.


>BTW, that seminar has led me
>to purchasing (cash +ve as it
>turns out) property which will
>be earning ATO far in excess
>of the fees paid for the
>seminar. So I'm not upset even
>if I don't get the deduction
>allowed. I will be extremely
>upset if I get fined again for
>something I did on good faith
>with good advice.
>


Yes, this is one of the reasons why I believe that such expenses MIGHT be tax deductible.


have fun and good luck either way

Dale
 
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