Ask Mark Withers, director of Withers Tsang & Co questions relating to Tax and Asset Structures
Mark Withers and his team at Withers Tsang & Co specialise in advising on property related transactions, valuation and restructure services and tax planning.
I have a number of properties and businesses which I've sporadically acquired over the years and I want to get them more ordered. I currently have our family home with a minor dwelling in our own names. Another two rental properties (already past the bright line test) are in our own names. A third rental is in a limited liability company (and I will elect to change it into an LTC once current losses are used up).
Our strategy is to buy and hold positively geared multi-unit rentals. We're not looking at trading or selling. I assume it's best to transfer the two rentals in our name to the LTC? I also own three separate limited companies. How can I protect my own family home and rental properties from any business risk/liabilities?
Martin Jr asks:
We currently have a rental property but this property was initially bought as owner-occupied. Due to a change in personal circumstances, the occupier of the property moved back to our family home and we decided to rent out the property instead.
My first question is: Can the costs associated with buying the property and securing the mortgage for the property, such as solicitor fees and valuation fees, still be claimed as deductible expense against the rental income, even though we initially bought the property not for rental purposes?
My second question is: For the ongoing expenses of the rental property such as insurance, rates and mortgage interest, can we start claiming deductions for these at the time the property is available for rent - ie: when we first advertised it for rent? Or can we only claim these expenses against the rental income at the time the tenant moved into the property and started paying rent?
Thank you very much for your response.
We have owned a rental property since 1999. In January we sold half to my daughter and her husband. I am currently completing our IR3s and can't seem to find anywhere to tell them about the house sale as it definitely falls in the non-taxable sales bracket. I don't need to fill in an IR833 or tick other income. I am wondering about depreciation recovery, I am filing the IR3s myself as they are due soon!