Hi,
The rental property was being built in the 2023 F/Y and was finalised/rented in May 2024 (i.e. 2024 F/Y).
The client prepaid a fee in the 2023 F/Y to a property investment group for the following expenses (listed on the invoice):
- Inspection fee
- Depreciation report
- Rental guarantee (12 months)
- Garden maintenance
- Tenancy costs & photos
- Training & mentoring (12 months)
We did not claim these expenses in the 2023 F/Y tax return, as the rental property was not available for rent (i.e. still being constructed and not advertised for rent). No tax deduction is available for prepaid expenses.
Can you claim these prepaid expenses in the 2024 F/Y tax return, even though they were paid in the 2023 F/Y? My understanding is that the expenses were 'incurred' for the 2024 F/Y (even though they were paid in the 2023 F/Y) and it would be an allowable tax deduction in the 2024 F/Y.
Thanks for your help.
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