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Deductions - Taxation - Land Tax

Discussion in 'Accounting, Tax & Legal' started by archangelsupreme, 19th Apr, 2009.

  1. archangelsupreme

    archangelsupreme Well-Known Member

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    Location:
    Australia
    Hi,

    Just wondering how the tax treatment for the following scenarious would work:

    1) Land Tax

    You can pay in installments or in a full payment. Do I need to pay in full by June 30th in order to claim all of the land tax in deductions? i.e. do you only get a deduction on the amount you paid during the financial year i.e. 2008/09 or can you pay in installments over the 09/10 period but claim the total amount of land tax (which is for the year of 2008) in the 08/09 period.
     
  2. Rob G.

    Rob G. Well-Known Member

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    Melbourne, VIC
    See TR 97/7.

    Cheers,

    Rob
     
  3. archangelsupreme

    archangelsupreme Well-Known Member

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    So I can claim the full lot in this financial year 08/09....since the land tax was for this period.....and it doesn't matter how or when i pay...i.e. even in installments subsequent to end of financial year?

    Yes or No would be good. Ta
     
  4. Rob G.

    Rob G. Well-Known Member

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    There never is a straight yes/no ... it depends on circumstances such as the terms from your SRO.

    If the LIABILITY to land tax has arisen then you have incurred the expense in spite of it not being paid. Payment in arrears does not necessarily delay liability.

    Contrast with example 3 of TR 97/7 where an invoice for payment IN ADVANCE is issued for a discretionary expenditure - if not paid then this is not incurred since it is discretionary whether you pay.

    Cheers,

    Rob
     
  5. archangelsupreme

    archangelsupreme Well-Known Member

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    Location:
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    Not sure if this applies by the ATO's guide on Prepaid Expenses advised that if the amount is less than $1,000 than it can be fully claimed in the same year???

    I've got a similar situation with Building's Insurance....if you pay the insurance premium upfront (say in May 09) it will cover you up to May 2010.

    Can I claim the full amount in this year's Tax return or do I need to apportion the cost and can only claim May/June 09 this financial year and July-May 2010 in the next financial year.
     
  6. Rob G.

    Rob G. Well-Known Member

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    Your original question was about deducting expenses you had not yet paid or paid in full ?

    Cheers,

    Rob
     
  7. archangelsupreme

    archangelsupreme Well-Known Member

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    Location:
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    I haven't paid my Land Tax yet..........i'm still weighing up the options of either paying in full before financial year end....or breaking it into installments and paying per quarter..etc.