Tax Tips: Rental properties and depreciation on plant and equipment

RENTAL PROPERTY CHANGES

The Government has released draft legislation that seeks to put into effect the changes for rental property claims, as foreshadowed in the last Budget.
Briefly the two measures seek:

• to remove travel claims for inspecting a rental property especially targeting interstate properties and
• to limit the amount of depreciation on second hand plant and equipment

These measures take effect from 1 July 2017.

RIDE SHARING

There are a number of our clients who are involved in part-time Uber driving and other ride sharing work as a source of income.
The ATO has indicated these drivers will be subject to potential scrutiny to ensure that they include all income earned from this pursuit, even though it may only be a part time vocation.
Similar to taxi drivers, they must ensure they are registered for GST from the first dollar earned and pay GST on the full fare. However, they will be entitled to claim back the GST paid on all their inputs, car repairs, petrol etc.
With the ATO’s increased income and data matching, they have highlighted the fact that they are on the lookout for non-registered drivers and through their data matching capability will be alerted to those who don’t comply with the tax laws.

COMMISSIONER WARNS OF OVER CLAIMING

In his address to the National Press Club in July 2017 the Commissioner of Taxation, Mr Chris Jordan AO, gave some advice to individual taxpayers as we are in the midst of tax season.
Amongst many items of interest to the ATO there will be increased scrutiny of clothing and uniform claims, as well as claims for car expenses.
As a warning to our clients, it is important to ensure that only legitimate claims are made where these items are necessary to producing your income; and that proper records are kept.