ATO and deprciation on IP's

[Garry K]

Todays AFR reports that the ATO 'intended to take an extremely hard line on what items would be classidfied as plant."

In particular light fittings, emergency light systems and satellite dishes, which may be re-classified as part of the building, bit will look at all 200 items of "plant".

The aim is to reduce the amount of depreciation deductions claimed on new peoperties.
They say that losses now exceed income $700M.

If this goes ahead, can the ATO make it retrospective ie say it applies for this tax year?

And would it only apply to properties bought after the date the changes are introduced, and therefore not apply to existing IP's .


GarryK :(

[geoffw]

This article was also referenced today (http://www.somersoft.com/forums/showthread.php?t=14970) by AceyDucey.

My worry would be that they reclassified items as plant- and then go back a number of previous years and disallow deductions. And even worse- fine people for defrauding the government.

It has happened- tax effective schemes.

[Aceyducey]

It looked like from the article that the intention was to bring it in for the next
tax year. I doubt such a wide-reaching change would be made retrospective.

In general Australia's governments attempt to avoid retrospective legislation where possible - they create too many issues :)

(and that was the argument publicly used by Howard to dismiss retrospective legislation to allow David Hicks & the other Aussie under US confinement to serve their prison sentences in Australia)

Cheers,

Aceyducey

[MJK]

But would it apply to all property or only property bought after July 1 ? Would depreciation schedules done before July one become useless or would only new shedules need to reflect changes ? Assuming of course that something happens at all.

MJK