OK – I got to many conflicting answers to this in the office (Im a finance broker).
Scenario: You sign a IP contract of sale say, May 1st 2004 but dont settle the property until say, 1st July 2004.
Q: Can you make a pre payment equiv to 12mths interest to the bank in a trust account and specify at the start (when the pre payment was made before end of financial year) that the amount was prepaid interest to be used for at settlement of loan (1st July 2004) and then claim the tax deduction in the 2003/04 Financial year because the property was purchased before the end of the fin year?
My gut feeling is that you don’t own the property until settlement and the answer is no but I’m no accountant.
Hope this makes sense!
Clint
CheersIf you do nothing remember that’s your guarnteed outcome…
Hi Clint
On the face of it I don’t see how you can make interest payments or claim any deductions on a property you don’t own, a question for an accountant. Pose the question in the Accountancy/tax section?
Brendon
Acute Mortgage Reductions
http://www.acutemr.com.au
[email protected]Correct. No corresponding income or asset in the 03/04 year and therefore no deduction. At best you may argue that it’s an acquisition cost and therefore it’s added to the cost base. But I don’t think that’s the desired outcome.
Cheers
Stu
The short answer – no. Don’t own it – can’t claim it..
theloanarranger
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