Hi all, I have an investment property and the boundary fence has fallen down and I need to replace it.
Can I claim the new fence in my tax return as an expense?
I live in Vic, not sure if they have different tax rules or not.
Regards,
Kristian.
If you are completely replacing the fence, then it is not an expense according to the tax office.
A fence is one of the examples given on the ATO website in relation to expenses vs capital items. It differentiates between fence repairs and completely replacing a fence.
Here is the link:
http://www.ato.gov.au/individuals/content.asp?doc=/content/00183233.htm
If you just purchased the property and the fences were in a state of disrepair then when you replaced the fence you actually improved the fence beyond what state you purchased the property at. Thus it will be classed as improvement as another crazy grey area of Tax Law.
Ladybird is also correct in the entirety rule which is also another grey area of Tax Law also.
I had the pleasure of replacing the back fence a 12 years or older fence only to have the tree in the backyard drop a branch onto the new fence.
So I guess the replaced fence is repair as it is about 40% of the fence –
and the repair is a repair though the tree damage.http://law.ato.gov.au/atolaw/view.htm?docid=TXR/TR9723/NAT/ATO/00001
See section 1d and point 5
see section 59 -66Hi, Thanks so much for your replies. It's a shame about that. I'm just about to go read those links you posted.
Thanks again.
A repair is bringing the item up to the same quality as it was when you purchased it. An improvement is something which is more – ie brings it up to a better condition.
This could be a repair if you replace the fence with the same materials as it is now. eg a wooden pailing fence being replaced with a wooden pailing fence = repair, but a colourbond fence = improvement.
If it is a repair it could possibly be claimed up from.
If it is an improvement then you can always claim depreciation over a number of years.
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 Terryw,
Yes the plan is to replace the pailing fence with another pailing fence. Not planning on improving it by changing the materials.
Regards,
Kristian.
It could be claimable outright then, better check with your tax agent.
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
Cheers, thanks for the advice
Hello,
We had sourced quotes and booked a contractor to build a new boundary fence (colourbond), as the old timber one was falling down. Our boundary is shared by an investor. Our issue is we were left with option but to purchase the materials and do the work ourselves. Therefore, we have receipts for proof of purchase, but cannot provide a Tax invoice for reimbursement. I guess my question is; can a investor still claim their share of the new fence expense, with an email trail, receipts for materials purchased by the neighbouring owners and photo evidence?Hello,
We had sourced quotes and booked a contractor to build a new boundary fence (colourbond), as the old timber one was falling down. Our boundary is shared by an investor. Our issue is we were left with option but to purchase the materials and do the work ourselves. Therefore, we have receipts for proof of purchase, but cannot provide a Tax invoice for reimbursement. I guess my question is; can a investor still claim their share of the new fence expense, with an email trail, receipts for materials purchased by the neighbouring owners and photo evidence?They could claim anything – but if audited they need evidence of payment and what it was for. Why can’t you give an invoice? no ABN needed
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
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