Travel deducability
- Thread starter MJK
- Start date
It's not black and white- be careful.
This one is from 2001- I don't know if the same rules apply.
http://www.ato.gov.au/individuals/content.asp?doc=/content/9033.htm&page=1 1
This one is from 2001- I don't know if the same rules apply.
http://www.ato.gov.au/individuals/content.asp?doc=/content/9033.htm&page=1 1
If the IP is in a trust, the trust can pay you travel allowance and then claim the tax deduction.
Di
Di
performance said:
Di. Can you elaborate please ? Peter 147
Hi Peter147,
This is explained in Dale's "Trust Magic" and if you do a search on "travel expense" you'll find more info. As Dale explains, the background to this is the same way our politicians are paid an allowance for travel away from home, shown as income but also claimed as an automatic tax deduction.
This is how I understand it............. Our IP is owned by the trust, in which we are directors. So any travel done by us (eg inspecting the property or looking for more IP's) is done on behalf of the trust. Therefore the trust pays us a daily travel allowance , which is a tax deduction to the trust. That allowance is income to us and is then offset by by the automatic tax deduction. Our accountant is ok with this and this is what we have done. As always you should check with your accountant.
Hope that helps
Di
This is explained in Dale's "Trust Magic" and if you do a search on "travel expense" you'll find more info. As Dale explains, the background to this is the same way our politicians are paid an allowance for travel away from home, shown as income but also claimed as an automatic tax deduction.
This is how I understand it............. Our IP is owned by the trust, in which we are directors. So any travel done by us (eg inspecting the property or looking for more IP's) is done on behalf of the trust. Therefore the trust pays us a daily travel allowance , which is a tax deduction to the trust. That allowance is income to us and is then offset by by the automatic tax deduction. Our accountant is ok with this and this is what we have done. As always you should check with your accountant.
Hope that helps
Di
I should read my Trust Magic again.Di, you say you are directors. Is that of the Trustee Company? Personally my wife is the Trustee.
Therefore in our case only she could claim expenses? I assume? Perhaps we should change that?
Again I promise to read my Magic but thanks for your reply.
Peter 147
Hi Peter147,
Sorry I'm in work mode.
We have a Trustee company, of which I am the "appointer" and my husband is the "principal", setup by our accountant and I'm guessing we are able to both claim. This is our first year so I will confirm when we do our returns but this is my understanding. It's hard to keep up on all the fine detail sometimes
so it seems to be never ending learning curve
Sorry I'm in work mode.
We have a Trustee company, of which I am the "appointer" and my husband is the "principal", setup by our accountant and I'm guessing we are able to both claim. This is our first year so I will confirm when we do our returns but this is my understanding. It's hard to keep up on all the fine detail sometimes
so it seems to be never ending learning curve
performance said:Hi Peter147,
Sorry I'm in work mode.
We have a Trustee company, of which I am the "appointer" and my husband is the "principal", setup by our accountant and I'm guessing we are able to both claim. This is our first year so I will confirm when we do our returns but this is my understanding. It's hard to keep up on all the fine detail sometimes
so it seems to be never ending learning curve
Performance hi, there is an appointer of the trust, this is the person who can hire/fire the trustee. The trustee is the identity that manages the trust from day to day. you an have individuals or companies as trustees. The trustee, to my knowledge can't get the travel allowance. If you have a company as the trustee then the "trustee company" can pay its employees (directors/secretaries/etc) a travel allowance under the guise of (normal business costs).
MJK said:
MJK hi,
need to be careful with this one. As you have gone somewhere for a week and 2 days of that week was managing your investment, the ATO may deem the main reason for travel was holiday thus you can claim none of the airfares and only reasonable costs for the 2 days that you were "working" ie maybe some meals and some kilometres in a car. Get some professional advice but I suspect you are on thin ice if you try anything else.
On the other hand if you are both employees of a trustee company then as mentioned previously the trustee company could pay you say $200/day for the 2 days and this we probably work out more than what you could claim if you are either a trustee (person) or property owned in your own name.
Norman
Thanks to all for the comments . Off to the Accountant, Peter 147
Another general point.
When travel expenses can be claimed (say an interstate trip) ATO sets an amount which can be claimed. You do not have to spend the full amount they set in order to claim it.
So for instance, the rate for Melbourne for 2003-2004, if you earn less than $75,400, is $150 for accommodation, $71.50 for meals, and $13.85 for incidentals- see http://law.ato.gov.au/atolaw/view.htm?docid=TXR/TR20037/NAT/ATO/00001
When travel expenses can be claimed (say an interstate trip) ATO sets an amount which can be claimed. You do not have to spend the full amount they set in order to claim it.
So for instance, the rate for Melbourne for 2003-2004, if you earn less than $75,400, is $150 for accommodation, $71.50 for meals, and $13.85 for incidentals- see http://law.ato.gov.au/atolaw/view.htm?docid=TXR/TR20037/NAT/ATO/00001
Interesting question,
What happens when I am in B.F.E. (read anywhere a long way from home) lets say, Chile, and I wish to head back to Aus for a 5 day inpection of 10 scattered properties?
Anyone have any ideas on that ? Assuming still considered Aust Citizen as I have no fixed OS address or employment. Taxation considerations are only in Aust. so no foreign revenue. Hmmm ?
Anyone?
astroboy
What happens when I am in B.F.E. (read anywhere a long way from home) lets say, Chile, and I wish to head back to Aus for a 5 day inpection of 10 scattered properties?
Anyone have any ideas on that ? Assuming still considered Aust Citizen as I have no fixed OS address or employment. Taxation considerations are only in Aust. so no foreign revenue. Hmmm ?
Anyone?
astroboy
Hi Astroboy
If the purpose of the trip is to visit the IP's and meet with the property managers, bankers (was that spelt right?) etc etc then the cost should be tax deductible - in full, or, in part. However, you would be wise to keep a travel diary noting who you met with and for how long, when you made inspections and generally all the IP and income related things that you did.
Then, you and your accountant could ascertain what deduction you might be entitled to.
Cheers
Dale
If the purpose of the trip is to visit the IP's and meet with the property managers, bankers (was that spelt right?) etc etc then the cost should be tax deductible - in full, or, in part. However, you would be wise to keep a travel diary noting who you met with and for how long, when you made inspections and generally all the IP and income related things that you did.
Then, you and your accountant could ascertain what deduction you might be entitled to.
Cheers
Dale
geoffw said:
Hi,
What Geoff is talking about here is for Employees and those who are viewed as Employees under common law, ie directors. Also what is stated is what the ATO regards as reasonable and hence no substantiation. You are able to spend more and can claim more but you need to keep records to support your claim. This does not cover those not considered employees.
So make sure your trust is managed by trustee company and you are the directorNorman
Similar threads
