|
|
此文章由 LENNY_DONG 原创或转贴，不代表本站立场和观点，版权归 oursteps.com.au 和作者 LENNY_DONG 所有！转贴必须注明作者、出处和本声明，并保持内容完整
ATO Interpretative Decision
ATO ID 2001/479
Income Tax
Rental Property - holding expenses on vacant land held for future income producing purposes.
FOI status: may be released
Status of this decision: Decision Current
CAUTION: This is an edited and summarised record of a Tax Office decision. This record is not published as a form of advice. It is being made available for your inspection to meet FOI requirements, because it may be used by an officer in making another decision.
This ATOID provides you with the following level of protection:
If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.
Issue
Can the taxpayer claim a deduction under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) for rates and other holding costs incurred on a vacant block of land held for future income producing purposes?
Decision
Yes, the taxpayer can claim a deduction under section 8-1 of the ITAA 1997 for rates and other holding costs incurred on a vacant block of land held for future income producing purposes.
Facts
The taxpayer purchased land and intends to complete the building of a house on the land within 12 to 18 months of purchase.
The taxpayer intends to use the property to produce rental income.
The taxpayer incurs local council, water and sewage rates, land taxes and emergency services levies with regard to the property prior to the completion of the building of the house.
Reasons for Decision
Section 8-1 of the ITAA 1997 allows a deduction for all losses and outgoings to the extent to which they are incurred in gaining or producing assessable income except where the outgoings are of a capital, private or domestic nature.
It is not necessary that the expenditure in question should produce assessable income in the same year in which the expenditure is incurred. Taxation Ruling TR 2004/4 in considering the decision of the High Court in Steele» v. Deputy Commissioner of Taxation (1999) 197 CLR 459; 99 ATC 4242; (1999) 41 ATR 139 (Steele's Case) concludes that interest incurred in a period prior to the derivation of relevant assessable income will be incurred in gaining or producing the assessable income in the following circumstances:
-
The interest is not incurred 'too soon', is not preliminary to the income earning activities and is not a prelude to those activities;
-
The interest is not private or domestic;
-
The period of interest outgoings prior to the derivation of relevant assessable income is not so long, taking into account the kind of income earning activities involved, that the necessary connection between outgoings and assessable income is lost;
-
The interest is incurred with one end in view, the gaining or producing of assessable income; and
-
Continuing efforts are undertaken in pursuit of that end.
While Steele's Case deals with the issue of interest, the principles can be applied to other types of expenditure including local council, water and sewage rates, land taxes and emergency services levies.
The expenses are incurred with regard to property to be used solely for income producing purposes. The expenses are not considered to have been incurred at a point 'too soon' before the commencement of the income producing activity.
There is no private or domestic purpose for holding the property, the taxpayer's intention was always to build an income producing property.
The length of time between purchase of the property and commencement of construction is not considered to be so long that the necessary connection between the outgoings and the assessable income is lost. The taxpayer intended to complete construction within 12 to 18 months of the purchase of the land.
In these circumstances, the taxpayer is entitled to a deduction for expenses such as local council, water and sewage rates, land taxes and emergency services levies under section 8-1 of the ITAA 1997.
[HISTORY: This ATOID was amended on 7 May 2007 by replacing the references to Taxation Ruling TR 2000/17 with references to Taxation Ruling TR 2004/4.]
Date of decision: 26 July 2001
Legislative References:
Income Tax Assessment Act 1997
section 8-1
Case References:
«Steele v. Deputy Commissioner of Taxation
(1999) 197 CLR 459
99 ATC 4242
41 ATR 139
Related Public Rulings (including Determinations)
Taxation Ruling TR 2004/4 |
|
新足迹厨艺大展示 12月下：主料鸡块——上菜啦~~啫啫鸡煲~~ (2008-12-19) 紫雪花 
发表于 2011-6-20 21:00
