In 2 separate AAT decisions, a married couple was unable to prove their claims for various rental property deductions.
The couple claimed deductions in the 2013 income year in respect of 6 rental properties in Sydney they owned jointly. Before the AAT, the outstanding issues were deductions for interest ($84,986 each), capital works ($1,874 each) and other rental property expenses ($13,540 each). The other expenses included body corporate fees, council rates, depreciation, insurance premiums, land tax and water charges.
Interest deductions. The taxpayers failed to prove that the loans were used to fund the rental properties and therefore failed to prove that the interest on the loans was deductible. In addition, the taxpayers failed to show that 3 of the 6 properties were rented or even made available for rent.
Capital works deductions. The disallowed claim for the capital works deductions related to one particular property (claims in respect of some of the other properties were allowed). The claim was based on the property in question being similar to another property. The claim was rejected as the taxpayers failed to provide stand-alone evidence of the capital works deductions claimed in relation to the property in question.
Other rental deductions. These were disallowed as there was no evidence to substantiate the expenses claimed by the taxpayers.
(Ferozkohei and FCT [2017] AATA 2405, AAT, File No: 2016/0286, Nicoletti SM, 29 November 2017;Ferozkohei and FCT [2017] AATA 2406, AAT, File No: 2016/0287, Nicoletti SM, 29 November 2017.)
[LTN 234, 6/12/17; Tax Month Dec 2017]