Thought this might be of interest. This was an e-mail sent to me by my QS
“Johanna Lowry of the ICAA attended a second ATO consultation meeting on rental properties and capital allowances on 20 February 2004. Members will be aware that rental properties are a compliance area the ATO is currently focusing on.
The ATO has concerns that rental property owners are not correctly distinguishing between Division 40 ITAA 1997 (depreciable assets) and Division 43 ITAA 1997 (capital works). With this in mind, the ATO is preparing a comprehensive list of articles, furniture and parts of buildings etc commonly found in rental properties, indicating whether Division 40 (plus the effective life) or Division 43 applies. The ATO hopes to include this list in the July 2004 edition of its Rental Properties publication, with the depreciable assets effective lives to be included as a 1 July 2004 addendum to the effective lives taxation ruling TR 2000/18.
The ATO is still formulating its position on how it will apply the law as regards mistakes it identifies in the course of its compliance reviews. For example, it may enforce the law prospectively from 1 July 2004 as regards “grey areas” where there has been genuine confusion. However amendments to prior year returns should be expected for mistakes where the correct treatment is clear from case law and/or rulings.
It is anticipated that when this residential rental property project is complete, the ATO team working on it will commence working on a similar project focusing on commercial properties. “
James
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