The ATO has enforced strict guidelines on tax deductions for rental property owner’s travel expenses.
As a rental property owner you are not able to claim deductions for travel expenses relating to inspecting, maintaining or collecting rent. If you have already claimed a tax deduction for the cost of travel to and from your property in your 2018 return, you will need to request an amendment. The law change came into effect on 1 July 2017 and affects tax returns from 2017-18 onwards.
Exclusions You may claim these travel expenses on your tax return if you are carrying on a rental property business or are an excluded entity.
An excluded entity is a:
Corporate tax entity
Superannuation plan that is not an SMSF
Public unit trust
Managed investment trust
A unit trust or a partnership, all of the members of which are entities of a type listed above
A super death benefit is the super paid after a person’s death, usually to a nominated beneficiary. These benefits are subject to different tax treatments, depending on whether the beneficiaries are dependant or non-dependant.
Superannuation death benefits will generally be received tax-free by tax dependants, who are considered to be:
A child of the deceased who is under 18 years of age,
A spouse or former spouse of the deceased,
A person who has an interdependency relationship with the deceased (e.g. if they live together or have a close personal relationship),
A financial dependant of the deceased.
Dependants will not have to pay tax on the tax-free component of their super in the event that they:
Withdraw it as a lump sum, or
Receive an account based income stream.
However, they will be taxed at their marginal rate if they receive a capped benefit income stream and:
The deceased was at least 60 years of age at the time of death
The dependent is over 60 years of age and the total of their tax-free component and taxed element exceeds their defined benefit income cap.
Not all super death benefits are subject to tax; for non-dependants, there is a taxable portion. This component is largely made up of after-tax super contributions that the deceased member has made.
Super death benefit payments are subject to tax when:
The payment is made as a result of the SMSF member passing away,
The payment is provided to a non-dependent for tax purposes,
The payment has a taxable component.
Non-dependants must calculate how much money in the super account is a:
Tax-free component,
Taxable component the super provider has paid tax on (taxed element),
Taxable component the super provider has not paid tax on (untaxed element).
The amount of tax non-dependants pay will be based on their marginal tax rate, however, this amount may be reduced by tax offsets. For the taxed element of the taxable component, the effective tax rate is your marginal tax rate of 17% (whichever is lower). For the untaxed element of the taxable component, the effective tax rate is 32% or your marginal tax rate (whichever is lower).
