It’s almost the end of the financial year. So now is the perfect time to do your tax returns for 2017 as well as forward planning for 2018, to ensure that you can save on tax that is payable.
Besides the usual receipts and items that are claimable there are a few tips and reminders I would like to give you.
1. Capital losses you incur in any financial year can be carried forward and offset by any capital gains for an infinite period. Capital losses in property can only be offset against capital gains in that property. So ensure you keep all records up to date. With only a month to go before the financial year ending it is probably too late to create a gain to offset any loss. But this makes it a perfect time to do some forward planning.
2. The 50% capital gains discount is available where an asset is held for a period of more than 12 months. This important date is from the contract date and not the eventual date of settlement.
3. If your investments are geared it may be worth pre- paying next year’s bank interest to gain an immediate tax deduction in the 2016- 2017 year.
4. Check on the depreciation claim of a property and its fittings. Any new maintenance or repairs, Property Management fees, rental losses, rates…etc. need to be taken into consideration in calculating your tax deductions. If you haven’t had a depreciation schedule carried out it may be worth engaging a quantity surveyor to do so.
5. Forward planning! Spend this time with your accountant to create a plan for the 2017- 2018 financial year. Organize to meet at least 3 months before the end of the next financial year to ensure you are on track with the plans you put in place the previous year.
As always I always suggest that my clients have an accountant that specializes in property and are property investor themselves. As these types of accountants have experience in what can be deducted and how to do this in the optimum way.
Everyone must pay Taxes and if you are paying tax it’s a good thing, as it means you are making money. But you should never pay more then what you need to!
Happy Tax Time.
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