At this time of the year, it will be important to consider Tax implications for commercial landlords that have deferred or waived commercial rent, including bankruptcy or insolvency rent variations.

There may be income tax and goods and services tax (GST) implications, if:

- You give or have given a rent waiver or deferral to your tenant

- Your tenant can't pay their rent, including where their obligation to pay is varied or released under bankruptcy or insolvency law. This could be by way of a:

- Personal insolvency agreement

- Debt agreement under the Bankruptcy Act 1966

- Deed of company arrangement.

If you give your tenant a rent waiver or deferral or they cannot pay, including where their obligation is varied or released under a bankruptcy or insolvency law, the income you must declare, deductions you can claim, and your GST and CGT obligations depend on:

- If your existing agreement with your tenant has changed or a new or additional agreement has been created

- Your accounting method, which is either the

- Cash method of accounting, which recognises income when it's received

- Accrual method of accounting, which recognises income when earned, instead of when payment is received

Your income tax and GST position may be affected if you give a rent waiver or the obligation of your tenant to pay is varied or released under bankruptcy or insolvency law.

Cash accounting - When you agree to give a rent waiver to a tenant, you don't include rent that is never collected, including any waived amounts, in your assessable income.

If you account for GST on a cash basis, you only pay GST on the amount of rent you receive. If you waive rent, you don't need to pay the GST on the waived amount because you haven't received it.

If you agree to give a deferral or rent is deferred under bankruptcy or insolvency law, you only include the rent in your assessable income when you receive it. If you account for GST on a cash basis when you agree to give a deferral, you will not need to report GST for the deferred rent until you receive it.

There are no capital gains tax (CGT) consequences if an existing agreement between a landlord and tenant is changed without payment or other consideration.

For example, if you agree to a rent concession on an existing lease and the tenant doesn't pay money or give you anything else for the reduction, they have to pay under the lease.

If a new or additional agreement is created, there may be CGT consequences.

It will be prudent to speak with your accountant and or the ATO for further information and advice based on your own personal circumstances.