In this month’s newsletter:
We explain whether an activity is a hobby or a business, and why it’s important to understand the difference. Hint – there is no earnings limit involved.
We also look at new tax measures which have affected the travel and depreciation deductions that were previously available to rental property owners.
Those of our clients operating a business in partnership may ask whether loan interest is deductible on funds originally advanced by a partner for working capital. We explain the conditions of deductibility and the “refinancing principle”.
If your existing residence is eligible for the main residence exemption from Capital Gains Tax, you may like to know whether the exemption extends to additional land that you later acquired. We show you an ATO example.
Some SMSF trustees are confused by mixed messages from the ATO about property development. We look at whether it can be an allowable investment and what the compliance risks are. It’s a highly complicated area which is on the ATO’s radar, and requires specialist advice.
Please contact us if you require any advice in relation to the topics in this newsletter.