What record do you need to keep when running a business from home? What if I sell my property? What’s the CGT implications?
Records you need to keep
You need to keep records to substantiate your claims for all of your home-based business expenses. This includes written evidence, tax invoices or receipts for:
– purchase and repairs of furniture and equipment used for your business
– utility bills and cleaning expenses
– mortgage interest, rent, insurance and council rates (if you claim occupancy expenses)
– rental contract between homeowner and business (if you claim occupancy expenses)
– how you separate your business and private use (for example, a diary over a representative four-week period or records of how you calculated the percentage of your floor plan dedicated to your business).
Capital gains tax (CGT)
If you were entitled to claim occupancy expenses or you own your home and receive rental income from your business, there may be CGT implications when you sell your home. The main residence exemption may not apply for the proportion of your home and the periods that you used it for your business.
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