Repairs and Maintenance Tax Rules

Repairs & Maintenance Part 1 – Review of the Income Tax Rules

Investment in fixed assets is a significant part of the capital outlay for many businesses. The income tax deduction for repairs and maintenance of these assets is an area that continues to pose challenges for business owners and accountants.

There is no specific provision addressing the deduction for repairs and maintenance. Instead, the current income tax rules fall under the general deductibility rules.

The lack of specific legislation in this area creates uncertainty when distinguishing between capital and deductible expenditure.

This course will review the income tax treatment of repairs and maintenance, including:

• The process developed by the courts to determine the deductibility of repairs and maintenance expenditure
• Relevant court cases
• Repairs to recently acquired assets
• Notional repairs
• Deductibility of demolition costs

Each topic will include a review of the law, its application, and practical examples to illustrate the issues involved.

Repairs & Maintenance Part 2 – Tax Issues

Over the last eight years, there have been numerous changes and clarifications regarding the treatment of work done for specific purposes or on particular types of assets.

This course will clarify the income tax treatment of:

• Expenditure on leaky homes
• Earthquake strengthening expenditure
• Apportioning expenditure on an existing asset as capital and revenue
• Expenditure on existing residential rental buildings
• Expenditure on existing non-residential rental buildings

Each topic will include a review of the law, its application, and practical examples to illustrate the issues involved.

Suitable for: This course is designed for intermediate to advanced accountants in public practice working with SMEs. It is also suitable for corporate accountants managing SMEs.