Former STS taxpayers still using the STS accounting method
If the trust is eligible and has chosen to continue using the STS accounting method, calculate labels F Gross rent, G Interest deductions, and H Other rental deductions on the STS accounting method.
For more information, see Appendix 13.
Small business entities
Depreciating assets used in rental properties are generally excluded from the small business entity depreciation rules on the basis the assets are part of property that is subject to a depreciating asset lease.
For more information, see Small business entity concessions.
Gross rent
Show at label F Gross rent the gross amount of rental income. This item can't be a loss.
Rental income includes booking or letting fees, bond monies if the trust becomes entitled to retain them, any insurance payouts that compensate for lost or forgone rent, and reimbursements from tenants of deductible expenses incurred.
If the trust is registered for GST, and GST is payable in relation to rental income, exclude the GST from gross rent at label F.
Show rent from foreign sources at item 23 Other assessable foreign source income.
Lease premium received from a CGT event
A capital gain or a capital loss made from the receipt of a lease premium is shown at item 21 Capital gains.
For more information on CGT events involving leases, see Guide to capital gains tax 2024.
Interest deductions
Show at label G Interest deductions the total deductible amount of interest expense incurred in earning the rental income.
If borrowed monies are used to finance a property investment, interest paid on the borrowing generally is deductible. However, to the extent that the loan is used or refinanced for a private purpose, you must apportion the interest expense to account for the private use.
The thin capitalisation rules may apply to reduce interest deductions. These rules place a limit on the amount of interest and other borrowing costs that can be deducted for Australian tax purposes. For more information, see Appendix 3. The disallowed amount reduces the amount that would otherwise be included at label G.
If the TOFA rules apply to the trust, include all interest expenses incurred on monies borrowed to finance a property: this includes interest expense from financial arrangements subject to the TOFA rules at label G.
Capital works deductions
Show at label X Capital works deductions the total capital works deductions amount for rental buildings and structural improvements, such as fences, retaining walls and sealed driveways.
For more information on capital works deductions, see Appendix 5.
Other rental deductions
Show at label H Other rental deductions the total of other deductible expenses incurred in earning rental income.
If the trust is registered for GST and GST is payable in relation to rental income, exclude any input tax credit entitlements that arise in relation to expenses from the amount shown at label H.
Expenses listed here that are costs associated with borrowing and servicing debt may not be allowable deductions under the thin capitalisation rules; see Appendix 3. The disallowed amount reduces the amount that would otherwise be shown at label H.
Deductions for the decline in value of depreciating assets used to earn rental income are generally shown at label H. However, if the trust has allocated some of these assets to a low-value pool, you may need to record deductions at item 18 Other deductions; see Appendix 6.
Net rent
Show at label Net rent the net amount of any rent. If this amount is a loss, print L in the box at the amount.
For more information, see Rental properties guide 2024.
Tax agents who lodge trust tax returns through the practitioner lodgment service (PLS) must complete the Partnerships and trusts rental property schedule 2024 if item 9 Rent is completed. The schedule is only available to tax agents who lodge via PLS, if you are lodging a paper version of the trust return, you don't complete the schedule.
Continue to: Income excluding foreign income – items 10 to 15
Return to: Instructions to complete the Trust tax return 2024