All Topics / Legal & Accounting / Defer Capital Loss or Depreciation

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  • Profile photo of malik_nikunjmalik_nikunj
    Member
    @malik_nikunj
    Join Date: 2004
    Post Count: 14
    December 30, 2004 - 7:09 am

    Hi,

    If a property investor owning a negatively geared property is not working for one financial year or income is too low as he didn’t worked many days, then can:

    a. Depreciation and Capital Works Deductions be claimed in the next financial year ?
    b. Till how many years it can be deffered

    Thanks,
    Nick.

    Profile photo of masteraccountantsmasteraccountants
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    @masteraccountants
    Join Date: 2004
    Post Count: 77
    December 30, 2004 - 7:59 am

    Hi Nick,

    In this case, there is no capital loss. The negatively geared property gives rise to a loss on revenue account not on capital account.

    What you ask happens in effect, but not the way that you envisage. A current year deduction cannot be claimed in a future year. It has to be claimed in the relevant year to which it applies.

    So that, where in a given year the rental property expenses outweigh the rental property income and your own income, the result is a tax loss that is carried forward to future years to be claimed against future income.

    Tax losses can be carried forward indefinitely to be claimed against future income.

    Christopher Raynal
    Master Accountants Group Limited
    PO Box 46018 Herne Bay
    Auckland New Zealand
    Ph +64 9 360 3259
    Fax +64 9 360 2180
    http://www.masteraccountants.co.nz

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