Small Business - Work from home claim mortgage if wife owns?

[knightm]

I know there are previous threads about working from home and the pros and cons of claiming mortgage interest as a business cost given it creates a potential cgt liability for the percentage changed.

WHAT IF????

I run a business and claim mortgage interest (i am listed on mortgage along with wife) for the office percentage

BUT

title of home is in my wifes name only. She would not be employed in or an owner of the business. Does that mean no CGT as its her house and not her business?

Is this a loophole or would cgt still be payable?

 

[Aaron_C]

It is the legal interest on the TITLE which determines tax deductibility - so you are not entitled to any tax deductions from the mortgage in the first place.

 

[knightm]

ok, so i would guess same goes for rates. still can claim on the phone internet and electricity i think.

 

[Aaron_C]

ok, so i would guess same goes for rates. still can claim on the phone internet and electricity i think.

Yes those things of course you can claim for your business but not the mortgage since you do not own it. You can claim rent if she charges you rent though.

 

[knightm]

Yes those things of course you can claim for your business but not the mortgage since you do not own it. You can claim rent if she charges you rent though.

there is the rub - she rents the business some space and then needs to declare the income and the percentage of floor space with a future cgt event. Sounds like robbing peter to pay paul if i try to save a few dollars in tax in a business but it costs in income tax for her and cgt in the future.

 

[coastymike]

This is also assuming she has a home office in accordance with the guidelines in tr 93/30. In a lot of cases claiming home office occupancy expenses other than electricity, etc is very difficult. Refer to the barristers case where he was denied a deduction for a percentage of mortgage expenses , etc despite the fact he spent a fair amount of time in his home office reading cases, preparing materials, etc. a lot of the time people make a such a claim when they arent entitled to one.

The same would apply to rent. Unless you meet the very STRICT defintion of a home office in tr 93/30 you cannot claim a portion of rent either.

 

[knightm]

This is also assuming she has a home office in accordance with the guidelines in tr 93/30. In a lot of cases claiming home office occupancy expenses other than electricity, etc is very difficult. Refer to the barristers case where he was denied a deduction for a percentage of mortgage expenses , etc despite the fact he spent a fair amount of time in his home office reading cases, preparing materials, etc. a lot of the time people make a such a claim when they arent entitled to one.

The same would apply to rent. Unless you meet the very STRICT defintion of a home office in tr 93/30 you cannot claim a portion of rent either.

yep that is quite tight!