From: Les .
G'day Dale,
Would you please expand on the following - I just caught sight of it today, and have a few questions/concerns. I hope you can put me right on this....
"Although business will welcome a just released draft ruling on the new thin capitalisation (TC) rules, its announcement less than two weeks before the end of the financial year will leave companies rushing to claim their deductions."
Les>> Is this ruling ONLY for companies? (Later comments seem to say NO)
"Effective for tax periods commencing after 30 June 2001, the TC rules seek to limit the gearing of taxpayers to defined safe-harbour limits."
Les>> Sounds like ALL taxpayers, Dale - please, say it isn't so...
"In essence, if total debt exceeds 75 percent of 'assets' (net of certain liabilities) then tax deductions on interest will be disallowed."
Les>> Assuming this might apply, Dale, how do you interpret the last paragraph? Does it mean that Interest ABOVE 75% LVR is no longer Tax Deductible? Or, does it mean if LVR exceeds 75%, then NONE of the Interest is Tax Deductible?
Looking forward to your reply - or anyone else who are aware of this "Thin Cap ruling"
Regards,
Les
- "Eschew Obfuscation" - ;^)
G'day Dale,
Would you please expand on the following - I just caught sight of it today, and have a few questions/concerns. I hope you can put me right on this....
"Although business will welcome a just released draft ruling on the new thin capitalisation (TC) rules, its announcement less than two weeks before the end of the financial year will leave companies rushing to claim their deductions."
Les>> Is this ruling ONLY for companies? (Later comments seem to say NO)
"Effective for tax periods commencing after 30 June 2001, the TC rules seek to limit the gearing of taxpayers to defined safe-harbour limits."
Les>> Sounds like ALL taxpayers, Dale - please, say it isn't so...
"In essence, if total debt exceeds 75 percent of 'assets' (net of certain liabilities) then tax deductions on interest will be disallowed."
Les>> Assuming this might apply, Dale, how do you interpret the last paragraph? Does it mean that Interest ABOVE 75% LVR is no longer Tax Deductible? Or, does it mean if LVR exceeds 75%, then NONE of the Interest is Tax Deductible?
Looking forward to your reply - or anyone else who are aware of this "Thin Cap ruling"
Regards,
Les
- "Eschew Obfuscation" - ;^)
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