Join our investing community

HDT renovation expenses

Discussion in 'Accounting, Tax & Legal' started by capitalist, 5th Jul, 2006.

  1. capitalist

    capitalist Member

    Joined:
    1st Jan, 2006
    Posts:
    10
    Location:
    Melbourne
    Hi all,

    Recently I bought an IP through my HDT. I made a quick renovation while searching for a tenant. To help with the renovation works I engaged a handyman and I paid him cash on hand. He doesn't have a business so he couldn't give me any invoices.
    Can I claim the money I paid for his work?
    He is happy to include that amount in his tax return; he didn't earn any other income in the last financial year, however he doesn't receive any support from anyone.

    I think that the expense would have to be treated as capital and not repairs.

    Any comments?

    Thank you,
    capitalist
     
  2. Nigel Ward

    Nigel Ward Team InvestEd

    Joined:
    10th Jun, 2005
    Posts:
    1,172
    Hi Cap

    Surely a simple solution is to create an invoice for him, post it to him with a self addressed envelope, get him to sign it and return to you?

    As to GST related issues I think I'll have to defer to our accountants. The lazy tax office seems to like people to withhold the GST component in certain circumstances.

    Cheers
    N.