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Do you know how to use your business premises to get tax deductions?

by , 23 June 2014
The golden rule of business tax deductions is if it's a capital asset, you can't claim a deduction on it. This means your business premises, equipment and other general assets aren't claimable as deductions.

But, this doesn't mean you can't still use them to leverage other deductions.

While you can't claim the cost of a capital asset, you can claim the costs of running or maintaining that asset.

So here's how you can claim a few tax deductions off of your business premises.

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Claim tax deductions on running and maintaining your business premise

Your business premise is your biggest capital asset.  It's probably also your most expensive one. The cost of keeping it in tip-top shape can be pretty pricey. But the good news is you can claim back some of these a business tax deductions.
Let's say, you want to repair the cracked ceiling in your offices. You can claim the cost of the repairs as a tax deduction. 
'Repairs' also include insect fumigation and replacing wooden structures so you can claim them as tax deductible expenses . 
Just remember, a repair shouldn't result in you earning more money. If it does, it's an improvement and you can't claim it. 
So when else can you claim maintaining your business premises?

Is there a fire on your business premise? No problem

If there's a fire on your building and you lose all of your stock, you can claim it as a tax deduction. But remember the same 'capital asset' rule applies here.
You sell your stock to make an income, but your equipment makes the stock that you sell. This means your equipment is a capital asset so you can't claim its loss, but you can claim the loss of your stock.
So remember, your business premise can provide you with some tax deductions and tax allowance in the right situations. 

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