Tax traps for boat owners

With the current economic uncertainty and the high price of fuel, many boat owners may consider hiring or chartering out their boats for part of the year as a way to reduce the costs of what can be an expensive recreational activity.

However, while creating a sideline business and claiming tax deductions for boat expenses is attractive, owners won’t be able to claim deductions if they fail to qualify as a bona fide business under the Australian Taxation Office (ATO) rules governing boat charter.

In order to claim deductions for boat expenses, you need to tick all the boxes required by the ATO. The tax office has well-defined rules for determining whether or not a boat owner is carrying on a bona fide business. These include the prospect for profit, the availability of the boat for hire, and repetition and regularity of conduct.

If you need further information, please contact our office.

Categorised in: News AUS

This post was written by editor