I have always found that ruling somewhat of a problem. Nobody seems to have appealed as far as I can determine.
Some states impose land tax on 30 June year end. So liability arises prior to an assessment could even be issued. This process is at odds with other potential liabilities such as accrued entitlements to leave and statutory obligations such as annual leave, PAYG withheld for employee pay which is deductible as if were paid prior to 30 June. The costs may well be incurred also..There are many examples. All inconsistent.
Sure s8-1 says incurred. Can rental owners apportion monthly interest incurred ?? No. Its deductible when PAID. ie prepaid or based on date debited to loan.
The Commissioners own GIC rules differ also although now are closer to the view on land tax. The Commissioner doesn't allow taxpayers to self-assess and estimate accrued GIC and deduct that. I argue its as easily calculated as land tax where the taxpayer self-assesses their liability also. However no GIC can only be deducted when a tax liability has been determined. One rule for the land owner another for a taxpayer.
In an example I know of the OSR took 18months to accept that the client trust was a fixed trust and then issue assessments on that basis. Sometimes these review can occur years later. What would the deduction have been if the OSR found against the trust being a fixed trust and imposed a higher liability ??
How may this be a deduction when the trust has resolved and made distribution of the higher income which would now be LOWER ? It may well be a carried forward loss which reduces future year income ??
Just my two bobs worth. Rant ends.