Historical Expenses

[#1]

What is the ATO's view on claiming expenses in a tax return when the costs were actually incurred & paid for in previous financial years? Obviously amending tax returns is the most basic answer. Therefore I direct this question to deductions paid for but not claimed in years past the amendment period.

Example:

Client incurred claimable interest expenses in relation to an investment property for 5 financial years in a row. No interest claim has been made in previous years. Can we include the 5 years of interest incurred in the one financial year?

Thank-you.

[#2 · Accepted solution]

@LachlanRamsay 

Definitely not.

You need to either Lodge an objection to amend prior tax returns or use it as part of a 3rd element cost when selling the property.

[#3]

@LachlanRamsay @macfanboy 

Agree with the answer by macfanboy.

I recall that the amendment period was reduced from 5 to 2 years.

If the taxpayer used a registered Agent to prepare the returns and the Agent was told about the interest and omitted it then Safe Harbour Provisions may apply.

One does wonder how interest can be omitted from 5 years of Tax Returns.

Was the taxpayer self lodging?

Duncan