Get ASX Price


Liability limited by scheme approved under Professional Standards Legislation

Latest News
Hot Issues
Employee or independent contractor: What happens when it goes wrong?
Single Touch Payroll (STP) reporting irregularities: ATO contacting businesses
Employee entitlements, ‘wage theft’ and Fair Work: Why it’s time to be proactive
How's Australia really doing - the real figures?
Pension deeming rates cut from 1 July 2019
Audit warning sounded as ATO clamps down on dodgy claims
New ATO data-matching program – overseas movement data and HELP debt
ATO black economy strike force heads to Brisbane
Access to more resources and tools than most websites.
Tax Return Mistakes
SMSF advice appetite strong, says ASIC
Taxpayers confused by Scott Morrison’s $1,080 tax refund
Common STP set-up mistakes - ATO
Proposal to hold directors liable for GST set to pierce corporate veil
September 2019 - vital statistics for Australia
Tax Commissioner wants to turn black economy to ‘lighter shade of grey’
Changes to the Private Health Insurance Statement
Up to 9 in 10 ‘other’ expenses adjusted as ATO reveals dodgy claims
Downsizer Super Contribution
Tax payers to receive beefed up tax returns.
10 top global corporations since 1998
Catch-up Contributions
Life Insurance
Community tip-offs trigger ATO visits
Australia at a glance
2019: Tax Time Checklists - Individuals; Company; Trust; Partnership; and Super Funds
Small business clients need to be ready for STP by 30 September
Big four firm outlines new financial year checklist for SMSFs
Alert - Online Share Accommodation
Articles archive
Quarter 3 July - September 2019
Quarter 2 April - June 2019
Quarter 1 January - March 2019
Quarter 4 October - December 2018
Quarter 3 July - September 2018
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
 

Agostinelli Perlen
Phone: (03) 9654 2022 // Fax: (03) 9654 2044 // Email: info@agpe.com.au

Disclaimer | Privacy Statement