Latest News
Hot Issues
ATO dispels top tax time myths to clients as clampdown rolls out
Tools for budgeting, cash flow, Super and more ….
Guidance for SMSFs on transfer balance reporting
ATO issues alert on super, tax scams
Salary sacrifice integrity
Understanding the evolution of blockchain and cryptocurrencies
Update to Australia's vital statistics
Tax Time Checklists- Individual, Company, Trust, Partnership and Super Funds
SMSFs - Our 'hardest' jobs
Tax Office reveals adventurous, dubious claims ahead of tax time
ATO reveals top tax time mistakes, set to contact 1 million taxpayers
Watch out for charges with incoming GST laws.
Super savings gap for women stuck at 30%
‘Wipe the slate clean’: Clients, accountants urged to use new amnesty period
Statistics for all Australians
Touch Payroll (STP)
‘Calm before the storm’: Government proposes 12-month SG amnesty
Government intensifies cash payments crackdown - Kelly O'Dwyer
Passive investment companies tax rate still 30%
Cryptocurrency audits tipped to increase this EOFY
Australia by numbers – Update
$2.4m lost to tax scams, ACCC reports
No GST on digital currency
Federal Budget 2018 - Overview
Your Budget
4 components of our 2018 Federal Budget
Resources to help understand and implement Single Touch Payroll (STP)
New rules capture SMSFs trading big with cryptocurrency
New passive income test for lower corporate tax rate
Tools to help you manage your financial position are available on our site.
‘A simple mistake can attract our attention’: ATO reminder about FBT slips-ups
Articles archive
Quarter 2 April - June 2018
Quarter 1 January - March 2018
Quarter 4 October - December 2017
Quarter 3 July - September 2017
Quarter 2 April - June 2017
Quarter 1 January - March 2017
Quarter 4 October - December 2016
Quarter 3 July - September 2016
Quarter 2 April - June 2016
Quarter 1 January - March 2016
Quarter 4 October - December 2015
Quarter 3 July - September 2015
Quarter 2 April - June 2015
Quarter 1 January - March 2015
Quarter 4 October - December 2014
Quarter 1 of 2015
Articles
ATO states estimates are acceptable
Hockey considers super access for first time home buyers
Reportable Fringe Benefit Amount - Employer Reporting
Simple Mistake on Share Transfer
ATO highlights billions in forgotten super
In a bankruptcy what does a trustee do?
Bankruptcies, what are they?
SMSF trustees unprepared for new collectibles rules
We wish all our clients a Merry Christmas, a Happy New Year and a restful holiday
Employee Christmas Parties and Gifts – Any FBT?
Breaking down the latest ATO determination on TRIS
ATO states estimates are acceptable

 

Tax Ruling 97/25 details the requirements



       


Subsection 262A (4AJA) of the 1936 Income Tax Assessment Act requires the previous owner of a property to provide the new owner with relevant construction cost information. This is designed to allow the new owner to determine any capital works deductions that may be available.


Capital works deductions refer to claims that can be made due to the wear and tear of the building structure; including walls, floors and roofs.


It is the requirements outlined in Subsection 262A (4AJA) which leads BMT Tax Depreciation to request any available construction costs and details from property owners each and every time a tax depreciation schedule is produced.


Legislation recognises that this transfer of information between owners is not always possible for a multitude of reasons and has included a provision in the Act to allow the construction cost estimates prepared by a qualified professional to be submitted.


Outlined within TR 97/25 is the list of professionals deemed qualified to provide construction cost estimates.


This list includes:


  • Quantity Surveyors
  • Clerks of Works such as Project Officers for major building projects
  • Supervising Architects who approve payments on major projects and
  • Builders who are experienced in estimating construction costs for similar projects

TR 97/25 enables investors and Developers of projects to retain a suitably qualified professional with the most relevant experience and the most comprehensive schedule, even if that particular professional was not involved during the construction phase of the property.


This ruling has been strengthened by an ATO Issues Log in October 2006 (A235 Building Cost Estimate Acceptance). The ATO Issues Log confirmed that construction cost estimates from an appropriately qualified professional such as a Quantity Surveyor would be accepted in the case where a property owner had not made a reasonable effort to obtain the actual cost details from the previous owner.


The provision of construction costs as required by Subsection 262A (4AJA) is just a portion of the deductions calculated when completing a tax depreciation schedule.


When discussing depreciation, it is important to note that there are two areas in which a Quantity Surveyor will estimate and calculate deductions: the division 43 capital works deduction and division 40 plant and equipment depreciation.


In most cases it is the deductions related to plant and equipment items which lead to the greatest difference between depreciation schedules. Subsection 262 (4AJA) only refers to the deductions available from capital works deductions.


Plant and equipment will have a substantial impact on the depreciation deductions an investor or commercial property owner can claim when a specialist Quantity Surveyor compiles a comprehensive Capital Allowance and Tax Depreciation Schedule.


 


Bradley Beer
BMT Tax Depreciation
 


 




27th-March-2015

| home | our firm | about us | our compliance services | our consulting services |
| our pricing structure | secure FTP | latest news | links | contact us
|

CORPTAX SOLUTIONS Pty Ltd Chartered Accountants & Registered Tax Agents
ABN 83 095 268 358 | 23 St Helier Drive SORRENTO, WA. 6020 Australia | Phone: + 61 8 9246 9536 | Fax: +61 8 9246 9588
e-mail : info@corptaxsolutions.com.au

Site By AcctWeb