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Issue 136, 22 September 2006
Welcome to the latest issue of Thomson's Tax
& Accounting Insight, your free news service for tax and
accounting professionals.
Tax & Accounting Insight is the easy way to
keep up with the latest developments in your industry. Watch your
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Articles in this edition include:
Editorial Enquiries:
Tel: 1300 304 197
LRA.Service@thomson.com
Copyright:
Thomson Legal & Regulatory Limited
ABN 64 058 914 668
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Pyrmont NSW 2009
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Disclaimer:
The information contained in this bulletin neither represents nor
is intended to be legal or professional advice. While every care
has been taken in its preparation, no person should act
specifically on the basis of the material contained herein. If
expert assistance is required, competent professional advice
should be obtained.
Privacy
Policy
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Build Your House Upon The Rock (of
the Concession)
The CGT main residence concession available under section 118-150
for building, repairing or renovating a dwelling has some very
interesting aspects to it - especially given the wide variety of
circumstances in which taxpayers can use it, or attempt to use it.
Broadly, the concession allows taxpayers to claim the main
residence exemption for a maximum period of up to four years while
they build, repair or renovate a home, even though they do not
occupy it as their main residence during this period.
However, the availability of the concession is subject to a number
of conditions. Firstly, the taxpayer must move into the home 'as
soon as practicable after the work is finished'. Secondly,
the taxpayer must occupy the home as their main residence for at
least three months. Thirdly, no other dwelling can qualify as the
taxpayer's main residence during the period the concession
applies.
And, of course, the taxpayer must choose to apply the
concession (in terms of the way they prepare their return for the
income year in which the dwelling is disposed). However,
despite the relatively straightforward nature of the concession,
it still raises a number of questions of when it can or cannot be
used - or the extent to which it can be used in a particular
situation.
This is an excerpt from an article by Kirk
Wilson, Thomson ATP Senior Tax Writer, that appeared in Thomson's InTax
magazine (September 2006); Australia's best independent monthly
tax magazine. It provides concise reports of the latest tax news,
plus the practical implications of tax developments in an
easy-to-read magazine format. To find out more, phone
Thomson Customer Service on 1300 304 197 or click
here.
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Pre-Budget Submissions Invited for
2007/08 Federal Budget
The Treasurer has invited submissions from individuals,
business and community groups on their views regarding priorities
for the 2007/08 Federal Budget. He said it would be advisable for
those interested in making a submission to do so as soon as
possible, to ensure its consideration in the Budget context. The
deadline for submissions is Friday, 24 November 2006. Submissions
longer than five pages should be accompanied by an electronic
version, either on disk or CD, or emailed in Microsoft Word or
Adobe Acrobat format. Submissions should be forwarded to: Budget
Policy Division, Department of the Treasury, Langton Crescent,
Parkes ACT 2600; or email submissions to: prebudgetsubs@treasury.gov.au
The Treasury contact officer is David Crawford, ph: (02) 6263 3725.
The full text can be found at the Treasurer's website: Press
release No. 100, 14 September 2006
This article appeared in Thomson ATP's daily
Latest Tax News (14 September). With tax
fast-moving and ever changing - EVERY DAY, practitioners rely on
Thomson ATP's daily Latest Tax News (LTN) for quick, accurate,
comprehensive information - no compromises. When you need to know
what's new in tax and related news every day, there's only one
place to look - LTN. To find out more, click
here
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Service Trusts Arrangements
As part of its compliance program, the Tax Office has announced
that, where small to medium enterprises use service trust
arrangements, there will be less risk of an audit provided
taxpayers adhere to the Tax Office's guidelines in Taxation Ruling
2006/2.
TR 2006/2 considers the operation of service arrangements and
their direct relationship to allowable deductions and the
anti-avoidance regime.
Broadly, where the benefits conferred by a service trust
arrangement provide an objective commercial explanation of the
whole of the expenditure made under the arrangement, this will
alone suffice to ensure deductibility.
Tip: if you are currently operating a service trust
arrangement, ensure to keep the transaction at arm's length.
This
article appeared in Thomson's October Client
Alert Newsletter Service. Client Alert is a monthly newsletter
that promotes your business and develops your client's awareness
of upcoming tax issues. To find out more, phone Thomson
Customer Service on 1300 304 197 or click
here.
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