Are Accounting Fees Deductible in a Trust that has No Income?

Question

A client has a trust that now only owns a personal home, although previously it had some interest and rental income. We still prepare a set of financials re keeping track of where the funds get used etc. We charge the trust a fee. Is this fee deductible to the trust if there is no taxable activity now?

Answer

The costs of preparation of financial statements and income tax return are tax deductible and will be recognised as losses carried forward if there is no income.