AFF Member Stock Discussion

[Freq Flier 2013]

Y, I'd have trouble substantiating J if ever had to.

Happy with Y+ on VA domestic.

As long as the money spent is legally deductible the Ato doesn’t care if you flew Y or J.
Ie you buy an office desk for work worth $100 or $5,000 both are deductible. Cost is irrelevant. You can even buy a work desk made of solid gold still deductible.

Post automatically merged: Aug 22, 2023

Forget dividends, I'm going for the blue chip buffet basket

Great idea by the way. Have we got any contenders? Singaporeans seem to have the game worked out:

Secrets of getting the best AGM buffets

I’m eagerly waiting on responses to book in next years travel itinerary and buy 1 share.

 

[andye]

This is wrong. If you went to an agm then it is tax deductible. If you did other things that are private you would have had to fly anyway. So flights are always 100% deductible. Then you apportion accommodation and other costs based on deductible purpose. However 1 night is not unreasonable to claim.

That's not my understanding of the business travel rule. Mine is that if less than half of the trip is business related, you can only claim pro rata for travel and accom. Accept there seem to be multiple differing views on 0%, 100% or pro rata

 

[Mr_Orange]

That's not my understanding of the business travel rule. Mine is that if less than half of the trip is business related, you can only claim pro rata for travel and accom. Accept there seems to be multiple differing views on 0%, 100% or pro rata

Agreed and this accords with what I have been told before. 100% of the time needs to be attributable to the related business.

 

[burmans]

Agreed and this accords with what I have been told before. 100% of the time needs to be attributable to the related business.

My understanding also, this is why companies don’t allow you to tag on a holiday to a legitimate overseas business trip, they’ll lose some of the deductibility of the flight and hence have to pay FBT on that portion.

 

[SYD]

That's not my understanding of the business travel rule. Mine is that if less than half of the trip is business related, you can only claim pro rata for travel and accom. Accept there seem to be multiple differing views on 0%, 100% or pro rata

There are different rules for “business related” expenses (company deduction), Employees claiming work related travel (personal income tax return) and then individuals claiming travel related expenses relating to income producing assets (personal income tax return). The tax advice I have for the later is “pro rata” deduction.

My understanding also, this is why companies don’t allow you to tag on a holiday to a legitimate overseas business trip, they’ll lose some of the deductibility of the flight and hence have to pay FBT on that portion.

There are reasonable limits on personal time (particularly on OS travel) but yep, a one day meeting in New York followed by a 2 week holiday for the fall colours would be slapped with a huge FBT bill…. Companies should be making employees fill out travel diaries to prove they aren’t subsidising holidays.

 

[drron]

This is wrong. If you went to an agm then it is tax deductible. If you did other things that are private you would have had to fly anyway. So flights are always 100% deductible. Then you apportion accommodation and other costs based on deductible purpose. However 1 night is not unreasonable to claim.

The ATO thinks otherwise. This example is for an investment property but the same apportion rules for other investments.
Example: Apportionment of travel expenses


Bill and Marli King are joint owners of a residential rental property in a resort town on the north coast of Queensland. In 2016–17, they spent $1,800 on airfares and $1,500 on accommodation when they travelled from their home in Melbourne, mainly for the purpose of holidaying in the resort town, but also to inspect the property. They also spent $100 on taxi fares from the hotel to the rental property and back. The Kings spent:

• one day (10% of their total time in Queensland) on matters relating to the rental property
• nine days (90% of their total time in Queensland) swimming and sightseeing.

They can't claim a deduction for any part of the $1,800 airfares because the main purpose of the trip is a holiday and the property inspection is incidental.


Since the travel expenses were incurred in the 2016–17 year, they can claim deductions for the $100 taxi fare and $150 as a reasonable apportionment of the accommodation expenses (that is, 10% of $1,500).


The total expenses the Kings can claim are therefore $250 (that is, $100 tax fare plus $150 accommodation). Since they jointly own the rental property, they can claim a deduction of $125 each.

 

[Mr_Orange]

They can't claim a deduction for any part of the $1,800 airfares because the main purpose of the trip is a holiday and the property inspection is incidental.

This was the point that I was making. It is very hard to justify claiming flight expenses even if you spend 1 day on 'business' and 1 day visiting family. the ATO can argue that you needed to fly to visit your family, therefore the cost is not deductible.

 

[MARTINE]

This was the point that I was making. It is very hard to justify claiming flight expenses even if you spend 1 day on 'business' and 1 day visiting family. the ATO can argue that you needed to fly to visit your family, therefore the cost is not deductible.

Or - using the one day business one day recreation example….you need to visit your property and incidentally your family - apportion 50% to airfare. Only when audited do you have a chance to provide in detail that you planned to visit a resort for one day and one day at your property. If there is a documentation trail of the planned inspection on one day and one days rest this is completely legitimate. Agree - 1 day out of 28 is different but I would still claim 1/28th of the airfare; you still have to get there.

 

[Freq Flier 2013]

I typically use this reference there are a lot of examples.
Main point being that the cost of the flight would have been incurred if you only went for AGM or if you went AGM and some personal.

Claiming a tax deduction for business travel expenses | Australian Taxation Office

You can claim a tax deduction for expenses you incur travelling for your business.

www.ato.gov.au

Rebecca can claim:

• the return airfare to London (which does not have to be separated out as the primary purpose of her travel is for business, the sightseeing was incidental)

 

[Buzzard]

Attending an AGM, could you legitimately claim return flights and one night accommodation? How do you know when the meeting will end? Surely it makes sense to fly back around lunchtime next day.

 

[MooTime]

Rebecca can claim:

• the return airfare to London (which does not have to be separated out as the primary purpose of her travel is for business, the sightseeing was incidental)

And if you pass a beach, lose your clothes, look for them in the ocean, loose your footing in the sand and are swept to shore via a wave... multiple times then walk along the beach to dry off cos you didn't bring a towel, then grab a burger n beer cos your rather hungry.... All incidental i'd say.

 

[tgh]

Folks seeking to dud the fiscal fiend need to be creative.
So day 1 there is an agm for a held share OR a seminar OR…(endless other deductible actvities) , day 3 there is an appointment with the local rep of the share broker… who cancels at the last minute...
So you end up with two days to kill and go visit grandma.

 

[CaptJCool]

I typically use this reference there are a lot of examples.
Main point being that the cost of the flight would have been incurred if you only went for AGM or if you went AGM and some personal.

Claiming a tax deduction for business travel expenses | Australian Taxation Office

You can claim a tax deduction for expenses you incur travelling for your business.

www.ato.gov.au

Rebecca can claim:

• the return airfare to London (which does not have to be separated out as the primary purpose of her travel is for business, the sightseeing was incidental)

but see also

Seminars, conferences and training courses | Australian Taxation Office

Deductions for attending seminars, conferences, and first aid or other training courses connected with your work.

www.ato.gov.au

Megan flies to London for a 10-day work-related conference. She stays over for an extra 15 days to sightsee.

Megan can only claim a deduction for:

• the work-related portion of the airfares, which is 40% (10 days / 25 days)

AND
HERE'S THE SPECIFIC ADVICE RE TRAVEL TO AGM

Deductions from dividend income | Australian Taxation Office

www.ato.gov.au

You can claim a deduction for the full amount of your expenses where the sole purpose of the travel relates to the share investment. Where the travel is predominantly of a private nature, only the expenses which relate directly to servicing your portfolio will be allowable

 

[tgh]

lotta goody two shoes here… If Megan became unwell and secured a doctors certificate not to fly for ten days…..or needed to see a person relevant to the meeting or seminar who was not available for ten days post…whats a girl to do ????

 

[Freq Flier 2013]

but see also

Seminars, conferences and training courses | Australian Taxation Office

Deductions for attending seminars, conferences, and first aid or other training courses connected with your work.

www.ato.gov.au

Megan flies to London for a 10-day work-related conference. She stays over for an extra 15 days to sightsee.

Megan can only claim a deduction for:

• the work-related portion of the airfares, which is 40% (10 days / 25 days)

Different rules for individual claiming costs vs business claiming costs

 

[burmans]

Folks seeking to dud the fiscal fiend need to be creative.
So day 1 there is an agm for a held share OR a seminar OR…(endless other deductible actvities) , day 3 there is an appointment with the local rep of the share broker… who cancels at the last minute...
So you end up with two days to kill and go visit grandma.

Of course unless you are a multi national with plenty of money, in a fight with the ATO you are unlikely to win. Each to their own but I think with the ATO pushing it too creatively can be dangerous waters.

 

[CaptJCool]

Different rules for individual claiming costs vs business claiming costs

YES

the advice here is obvious
Sole Purpose Test

Deductions from dividend income | Australian Taxation Office

www.ato.gov.au

 

[Mr_Orange]

YES

the advice here is obvious
Sole Purpose Test

Deductions from dividend income | Australian Taxation Office

www.ato.gov.au

Thanks. Quoted, for ease of reference:

Travel expenses​

You may be able to claim a deduction for travel expenses where you need to travel to service your investment portfolio, for example, to consult with a broker or to attend a stock exchange or company meeting. You can claim a deduction for the full amount of your expenses where the sole purpose of the travel relates to the share investment. Where the travel is predominantly of a private nature, only the expenses which relate directly to servicing your portfolio will be allowable.

Just like I initially said!

 

[drron]

If you are planning on claiming for going to an AGM it is good practice to put in a question and saying in the email you will be attending. A help if you get audited.
Visiting my investment property is usually for the strata AGM but before I go I email a real estate agent who also Happens to be an owner saying I want to talk about the property and sale prices.
I go to a couple of resouce company symposiums. Only claimable if a company you own shares in is presenting but again simple with resource companies to email the CEO saying you will meet him there. They actually like interested investors.

Having been audited I like to make things as sure as possible.
I dis survive the audit but weren't that appreciative with the shoeboxes of receipts. however that changed their approach to well just show us some sample receiprs of the various types of deductions you are claiming. It was like a lucky dip at a school fete.

 

[Freq Flier 2013]

Thoughts on CMW? 0.43c seems cheep based on an NTA of 0.84c.
If interest rates have slowed then this should recover and keep its dividend yield.