In recent months, parts of Australia have been battered by a combination of fire and floods. As people try to piece their lives together in the aftermath, insurance payouts can go a long way in helping rebuild homes and replace lost items.
However, if you receive an insurance payout in relation to your business, home business or rental property you need to be aware there may be associated tax consequences. For example, if you keep a home office or run a business from home, or make money from renting out your home on a short-stay website, you may be subject to capital gains tax (CGT) when receiving an insurance payout on the home.
Businesses that receive an insurance payment may be subject to varying tax consequences depending on what the payment is designed to replace.
Tip: If you’ve recently received an insurance payment or you’re expecting one, contact us to find out more about how your tax obligations could be affected.