All Topics / Legal & Accounting / Primer on CGT or IP taxation ??

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  • Profile photo of joez71joez71
    Participant
    @joez71
    Join Date: 2006
    Post Count: 28

    Hi All are there and good books/info on minimising CGT or when Renovating an IP?

    My initial query's have to do with purchasing tools for the renovation… If I spend say $5K on tools and save 15K in renovation costs,  then fix and sell an IP will/can the tools be offset against my capital gains in anyway?

    Hope i am making sense :)

    thanks
    Joe

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213

    I don't think there are any specific books on this topic, there are general taxation books which could help, one is the tax summary which comes out annually. There is also the booklet on CGT from the ATO which may help you understand the tax in general.

    I think if you are conducting a business of renovation you should be able to claim tools. But the treatment of these may depend on their cost individually. Some large tools may need to be depreciated and smaller ones could be claimed outright.

    Not sure, but maybe the new extra 50% tax allowance may also apply.

    And, if you are going to get serious, have a look at trusts – the book "Trust Magic" is a good intro.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://structuring.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://Terryw.com.au/

    Profile photo of FletcherTaxFletcherTax
    Member
    @fletchertax
    Join Date: 2009
    Post Count: 31

    Joe

    You need to be careful when you are doing these renovations ie pre tenancy or during tenancy as both have different tax implications.

    Also need to distinguish between repairs (deductible) and capital improvements (depreciated)

    The ATO is coming down very heavily in this arena with a rise in desk type audits of rental/IP claims.

    Fletcher Tax Accountants
    http://www.fletchertaxaccountants.com.au

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