cheap rent when renting from myself

I could guess, but I wouldn’t dare[confused2]!

Interesting post, but definately one for the accountants on the forum!

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An interesting ? and one I posed to my accountant recently. He seems to think I can claim around 10% for my company / trust to occupy. Maybe I can make it more if I include rooms for meeting with agents etc.

I do know from a fellow I have been involved with that you may need to make your lounge room etc look like an office, right furnitute etc and with the right exits needed for security reasons that it is possible to claim more.

I guess it just comes down to being able to demonstrate it and justify it.

Good luck

Sue

sounds good, millionintraining

i assume your using your PPOR for your company to use a small office in…right

well don’t forget the other end…
what other end?

once you start claiming a tax deduction….all those 101010101010101010010101001 (digital data)(tax deductions) entres the ATO database.

so when you sell your PPOR…guess what….
up come all the 101010101010101010010101001
and there we have it
CGT on a % of you’ve PPOR…

taxes….helps pay for the PMs new 737, flying around the country

Terryw,
Don’t they say the two certainties in life are Death and Taxes?
There’s got to be a way!
There has got to be some way!!
The Bahamas or something?
They say Kerry Packer almost did it! – I wonder what he did?
I wonder if he left a note or something.
Maybe an arrow saying “This Way I can’t find the up arrow “[puke]

Harley

sorry redwing
but the way i read millionintrainings question is:
I iposed to my accountant recently. He seems to think I can claim around 10% for my company / trust to occupy. Maybe I can make it more if I include rooms for meeting with agents etc.

the key words here are

“here thinks i can claim around 10% for my company to occupy”

now that suggests to me that the property is his PPOR and he is trying to claim 10% usage for his company.
because, if the company owned the property…the question would be irrelevant…
why…the company owes the property outright…claims 100% costs

Did i read it right or am i just dyslectic

Hi Giddo,

I haven’t been in the commercial acctg world for a few years now & never been a public acct but your posting raises a few questions & hopefully I can give some useful suggestions. They’re only rough because I’m going from memory & haven’t looked up any references so don’t take them all as 100% gospel.

You won’t get any CGT discount because the house is owned by the coy & coys don’t get any CGT benefits unless it is on the sale of the company & it’s assets upon retirement & they are rolled over into another business or super’n investment. If you try to sell the house to yourself the ATO may dig to make sure it’s an arms length commercial transaction (don’t forget legal & stamp duty either). A valuation with a low result would be helpful & I’m sure a valuer would help without doing anything to get the ATO offside.

Dividends to reduce the net result to $0 for the year of sale may be worth looking at if you want to sell to yourself. Don’t forget the GCT action is the contract date, not settlement date.

I’m also curious about the charging of GST on a residential property. My understanding is that residential rentals don’t have GST applied even though the landlord is a company, it’s classified as being input taxed (unless it’s a short term accommodation such as hotel; a caravan park or similar). This will restrict the GST ITC’s the company can claim. Commercial rentals on the other hand do have GST applied so it would be worth investigating this with your accountant further.

All non-capital expenses incl GST are claimable by the coy in it’s tax return if ITC’s can’t be claimed. It may be possible, not very likely though, for the coy to make an adjustment claim for the overpaid GST but that will depend on whether it has been identified as GST on the tax invoices/receipts issued as well as a few other things.

You may be able to claim home office deductions in your tax return – another question for your accountant. It will depend on whether the coy provides office space and whether you are merely using home for convenience, the amount of work carried out, how the office is set up, whether the coy pays any of the outgoings, etc. The estimate can be floor space ratio or number of rooms for the rent & either of these or some other method that’s reasonable for other outgoings.

Don’t forget with the FBT option that it is charged at 48.5% so for example if the rent is $10k p.a you will be paying about the same amount in FBT, a total cost of approx 20k to the coy (pre-tax). Again get your acct to check out the best option. The coy tax rate is 30% & the top personal marginal rate (>95k) 48.5% incl m/c.

Your acct is going to be your best source of info but if you’re not confident in their ability change to somebody else just like you’d change banks or mechanics.

Cheerz

hi DLhadden
thanks for the info
but, even thou the GST and FBT questions are important, i guess the big picture question would be…”what happens at the end?”
if the property is sold, rolling over into another business or super (probably super, at giddo stage in life)…..
where would he live?
remember his PPOR is now sold, and the money is captured within the company?
if he rolls the sale into super, at the age of 55 he has acess to the 1st 130k tax free, and then the remained is drip fed, tax free, at a min and max rate over a lifetime.
if he wants to withdraw above the set amounts, then tax is payable.

or
if if its rolled over into another company…..what happens?
does it comes in as profit (to new company),then would 30% tax have to be paid ?
Is CGT tax bypassed completely , and instead, a 30% tax on profit?
then would the money stay within the company, until you can capatalize on the benefits from the franking tax …say when you retire?
Lastly…how do i buy another PPOR?

thanks