Hi All, I've paid a 10% deposit on an IP in July 08, but they've only just started building it now. I'm assuming I can't claim the interest on that deposit until the IP is getting rental income, so do I just carry forward that interest until the financial year it does earn rental income? It seems a bit odd claiming for expenses in a previous year though.
Thanks, S/CWhy assume that?
see the case of Steele
Steele v. FC of T 99 ATC 4242; (1999) 41 ATR 139And TR 2004/4
Income tax: deductions for interest incurred prior to the commencement of, or following the cessation of, relevant income earning activities
http://law.ato.gov.au/atolaw/view.htm?Docid=TXR/TR20044/NAT/ATO/00001Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Thanks Terry, I've since done a bit of reading about the Steele case. Sorry I should have done a bit more research, but that keyword "Steele" was the important bit of info I needed.
Just one thing: How do you claim for the interest when doing your tax online. It won't let you lodge unless you put a figure in the "date first rented" field. I lodged my daughter's tax (who's 50:50 with me on that property) by putting in $1 into the rent received field, and increasing the interest by $1 to make up. I had to put something in the date first rented field, so I chose the contract date.
Their software doesn't seem to cater for the Steele case.
Cheers, s/cSorry, not sure where to put it on the forms.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
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