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EFA Tax and Super Newsletter-August-2017

Travel Allowances (Per Diems) – It can be handy to to claim a ‘no receipts’ deduction against a travel allowance you received as an employee. The ATO has seen fit to make an exception to substantiate these claims in many circumstances. However, this exception comes with a warning — get it right and be able to explain it, or show your receipts. We run over the particulars.

Did you know that there are deductions that are specific to SMSFs? We summarise the types of expenses typically claimed by a fund and explain the conditions for deductibility.

We also look at deductions available for financing rental properties, the interaction between the new super transfer balance cap and child recipients of death benefits, and a tax break available for life policy bonuses held for a certain time.

Please contact us for clarification, or further advice, regarding any of the topics covered in this newsletter.

 

Notes:

For the life policy bonus ruling IT 2346, see this link and this interpretative decision. For the ruling on the specific deductions available to SMSFs, see this ATO webpage.

For more details about the deductibility of interest on money drawn down under a line of credit or redraw facilities, and the apportionment of interest where sub accounts are used for mixed purpose loans, see TR 2000/2.

For the taxation consequences for taxpayers entering into certain linked or split loan facilities, see TR 98/22. For the case law interpretation that influenced the final outcome regarding a split loan facility, see here. See also TD 2012/1 for the Commissioner’s view on the application of Part IVA to “investment loan repayment arrangements”. For loan offset arrangements, see this tax ruling.

For information on if a benefit received from a “mortgage offset facility” is included in assessable income, see the ATO’s private binding ruling 50720. For rulings that interest on a loan account will be fully deductible even if funds are re-directed to a non-income producing purpose, see private binding ruling 80150. Also for the above, see private binding ruling 19859 here.