Income tax - deductibility of farmhouse expenses
This Interpretation Statement explains that deductions for farmhouse expenses are available only to the extent that they are incurred in carrying on the farming business. This Interpretation Statement replaces a number of older items (some going back to the 1960’s) which allowed deductions which are no longer appropriate. Where the compliance costs outweighs any likely deduction, the Interpretation Statement allows some sole traders and partners of partnerships to adopt a practical approach. This allows an automatic 20% deduction for farmhouse expenses and 100% deductions for rates and interest. These deductions are allowed when the value of the farmhouse is 20% or less than the total value of the farm.