Hi all,
I recently replaced four internal doors and an ouside gate, both still operational but original vintage on a 1950’s IP.Should I claim these an Capital Expenditure or Revenue – Repairs and Maintenance.
Georay
I think if these new items were an improvement on the old ones they cannot be a repair/replacement and must be classed as improvements. Therefore they must be depreciated – I am not sure if they would be classed as building or fittings tho.
ps not an accountant.
Terryw
Discover Home Loans
North Sydney
[email protected]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
Hi,
The use of the word replacement indicates repairing something by replacing like with like, so you could claim the expenses 100% in the year of expenditure. This is in revenue account.
By like with like, waht I am saying is that where you replace a wooden door with a wooden door and where you replace a metal gate with a metal gate, so that there cannot be said to be any “improvement”.
The first contributor was correct if the replacement qualifies as an improvement, something different from what was there.
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.nzBelated many thanks for advise.
Geoff
Geoff,
If you haven’t already sorted the issue out, you could download and take a read through this:
http://law.ato.gov.au/pdf/tr97-23.pdf
While not the easiest thing to read, it goes over the definitions of repairs, renewals, and improvements and what’s deductible and what’s not.
Cheers,
GP
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