Solicitor's fees tax deductible?
- Thread starter macdub
- Start date
Sounds right.
However, I think solicitor's fees that the bank might incur setting up the mortgage docs might be deductible over 5 years???
I'm sure someone will confirm soon enough.
Solicitor fees for what?
If conveyancing for the transfer of land than this is generally a capital expense.
conveyancing fees charged for the settlement of my investment property..sorry first time investor and don't know a lot..
Deductible
Solicitors fees related to acquisition of any property will never be tax deductible. Even if relates to mortgage its non deductible as the purpose of the loan would be related to the "acqusition of the property". Refinance of an existing loan requiring additional legals may be deductible over 5 years but I would need to see the documentation to give that advice - Its rare. For example changing security may or may not be !! (ie Mum & Dad giving security = no but switching security for same owner = yes.)
Obtaining tax advice from a solicitor may be deductible in some instances but care should be taken that tax advice of any form isnt automatically deductible ! ie if the advice related to a tax scheme, private affairs, setting up a new arrangement, restructuring etc it is likely non-deductible. If the advice relates to present obligations and compliance its deductible.
Paul
Solicitors fees related to acquisition of any property will never be tax deductible. Even if relates to mortgage its non deductible as the purpose of the loan would be related to the "acqusition of the property". Refinance of an existing loan requiring additional legals may be deductible over 5 years but I would need to see the documentation to give that advice - Its rare. For example changing security may or may not be !! (ie Mum & Dad giving security = no but switching security for same owner = yes.)
Obtaining tax advice from a solicitor may be deductible in some instances but care should be taken that tax advice of any form isnt automatically deductible ! ie if the advice related to a tax scheme, private affairs, setting up a new arrangement, restructuring etc it is likely non-deductible. If the advice relates to present obligations and compliance its deductible.
Paul
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Legal costs directly attributable to raising finance to acquire an income producing asset would qualify for the 5 year deduction under s.25-25.
The whole point of s.25-25 is to allow certain capital costs to be deducted.
Cheers,
Rob
Does anyone have any experience with this? I'll discuss with my accountant but I'm keen to know if anyone has been able to deduct 'borrowing expenses' like trust setup costs, buyers agent fees and stamp duty over 5 years? See http://law.ato.gov.au/atolaw/view.htm?locid='PAC/19970038/25-25'&PiT=99991231235958#25-25
S25-25 deals with borrowing costs. Trust setup, buyers agent fees and stamp duty are all purchasing costs.
It was a nice Korean BBQ, Bulgogi and Kalbi etc hmmm
THe relevant section for claiming a truts deed set up would be:
http://www.austlii.edu.au/au/legis/cth/consol_act/itaa1997240/s40.880.html
THe relevant section for claiming a truts deed set up would be:
http://www.austlii.edu.au/au/legis/cth/consol_act/itaa1997240/s40.880.html
s8-1 : A deduction is (ONLY) permitted to the extent the expense is necessarily incurred in producing assessable income.
Legal fees are a element of the cost base where acquired on capital account.
Legal fees incurred in acquisition of land acquired for or later held as trading stock (ie a developer) legals become part of the trading stock based on cost (or market value if you wish). There is a deemed acquisition / disposal.
Good subdivision example here includes legals as a element of cost base.
Legal fees are a element of the cost base where acquired on capital account.
Legal fees incurred in acquisition of land acquired for or later held as trading stock (ie a developer) legals become part of the trading stock based on cost (or market value if you wish). There is a deemed acquisition / disposal.
Good subdivision example here includes legals as a element of cost base.
