Help with tax

[Erin8755]

Hi I am looking for a little help, I will seek an accountant but wanted to check in here first. 
I am managing a property for a family member who lives out of the country for parts of the year. I am dealing with all the income as well as everything else and taking an income from this the income all comes into my account. Are there things that are tax deductible each month before I set aside an amount for taxes each month? I have taken off cleaning fees, would my income come off before the tax is deducted as I am managing it or after. 

[Shelley159]

Hi @Erin8755 

For income tax, the basic position is that everything has to be taxed in someone's hands. The family member can deduct management fees paid to you - those management fees are then added to your income and taxed in your hands (assuming you're in a taxable position). The cleaning fees are deducted and taxed in the hands of the cleaning company, the amenities purchased are deducted and taxed in the hands of the retailer, etc. You'll need appropriate invoices for all.

[Erin8755]

Thank you, I had read somewhere that rent can be deducted as well as electricity etc is this correct? 

[Shelley159]

Yes any operating expenses including rent and electricity @Erin8755, to the extent that they relate to the business (in other words, if the whole home is not rented, only the applicable portion).

In the case of loan repayments, only the interest is a considered an expense and not the capital component of the repayment.

It may be hard to get into the habit of keeping tax invoices for all of the expenses, as you will need them when audited!