Latest News

Hot Issues
spacer
Tax Time Checklists- Individual, Company, Trust, Partnership and Super Funds
spacer
SMSFs - Our 'hardest' jobs
spacer
Tax Office reveals adventurous, dubious claims ahead of tax time
spacer
ATO reveals top tax time mistakes, set to contact 1 million taxpayers
spacer
Watch out for charges with incoming GST laws.
spacer
Super savings gap for women stuck at 30%
spacer
‘Wipe the slate clean’: Clients, accountants urged to use new amnesty period
spacer
Statistics for all Australians
spacer
Touch Payroll (STP)
spacer
‘Calm before the storm’: Government proposes 12-month SG amnesty
spacer
Government intensifies cash payments crackdown - Kelly O'Dwyer
spacer
Passive investment companies tax rate still 30%
spacer
Cryptocurrency audits tipped to increase this EOFY
spacer
Australia by numbers – Update
spacer
$2.4m lost to tax scams, ACCC reports
spacer
No GST on digital currency
spacer
Federal Budget 2018 - Overview
spacer
Your Budget
spacer
4 components of our 2018 Federal Budget
spacer
Resources to help understand and implement Single Touch Payroll (STP)
spacer
New rules capture SMSFs trading big with cryptocurrency
spacer
New passive income test for lower corporate tax rate
spacer
Tools to help you manage your financial position are available on our site.
spacer
‘A simple mistake can attract our attention’: ATO reminder about FBT slips-ups
spacer
Australia by numbers – Update
spacer
Beware residency rules if moving overseas
spacer
Meaningful tax reform in high demand
spacer
Working holidaymakers and tax returns
spacer
Single Touch Payroll – 1 April 2018 Action
spacer
Property investors on notice after ATO spots false claims
Article archive
spacer
Quarter 2 April - June 2018
spacer
Quarter 1 January - March 2018
spacer
Quarter 4 October - December 2017
spacer
Quarter 3 July - September 2017
spacer
Quarter 2 April - June 2017
spacer
Quarter 1 January - March 2017
spacer
Quarter 4 October - December 2016
spacer
Quarter 3 July - September 2016
spacer
Quarter 2 April - June 2016
spacer
Quarter 1 January - March 2016
spacer
Quarter 4 October - December 2015
spacer
Quarter 3 July - September 2015
spacer
Quarter 2 April - June 2015
spacer
Quarter 1 January - March 2015
spacer
Quarter 4 October - December 2014
Government ‘undermines’ tax system in new moves on property expenses

Newly-released draft legislation, which firms up the 2017 budget move to limit investors’ ability to claim travel expenses and depreciation deductions, will “upset the fundamental basis behind our tax system” according to an accounting body.

       

 

The Turnbull government on Friday released exposure draft legislation and explanatory material for the housing affordability and tax integrity measures it announced in the 2017-18 budget.

You can read the full draft here

The legislation means that property investors will no longer be able to claim travel expenses to inspect residential investment properties, and there are limitations to the depreciation deduction claims investors will be able to make on properties purchased after 9 May 2017.

Speaking to Accountants Daily, Institute of Public Accountants' senior tax adviser, Tony Greco, said that the changes go against the basis of Australia’s tax system.

“The premise behind our tax system is the ability to claim an expense against the revenues, so what they're doing is they're altering that fundamental right,” Mr Greco said.

“They’re basically saying we're not going to allow you a deduction against these kinds of expenditures, so it does upset the fundamental basis behind our tax system by excluding certain expenses.”

Mr Greco said that while these changes are essentially negative ones, many investors will be pleased that the government didn’t do more to tackle negative gearing.

“They didn't attack negative gearing in the federal budget, they didn’t make any changes other than these two measures, so some people were quite relieved on budget night that it just amounted to these two changes only,” he said.

“It does have a financial impact on the returns going forward, so it will have a negative impact, but if you thought they were going to dismantle negative gearing then you'd probably say it's not as bad as the expectation was.”

Mr Greco said that accountants must communicate these changes with their clients as soon as possible .

“Clients do claim travel for visiting and inspecting rental properties and some of those properties could be interstate, so accountants must communicate to their client that it's no longer deductible,” he said.

“Clients may not have realised, or may misunderstand, that with the travel one, irrespective of when you bought your property, it's just a total outright ban on deductibility, whereas the plant and equipment one depends on when you purchased the property.”

The government is accepting submissions to the draft legislation until 10 August 2017.

 

LARA BULLOCK
17 July 2017
www.accountantsdaily.com.au

© O'Brien and Partners 2011 - All Rights Reserved | 91 Station Street, Malvern VIC 3144 | Tel: 03 9509 3911 | Fax: 03 9509 3922