Avenir Group Tax Update

January 2007

Updated 2007 Land Valuations for NSW Land Tax

Land Tax in NSW is determined on the value of land owned at midnight 31st December 2006.The value of land is determined annually and provided by the Valuer General.

Starting with the 2007 land tax year the taxable value of land will now be calculated as an average of the current and the previous two years value.

If you have acquired land during the 2006 calendar year you will need to register with the Office of State Revenue before 31st March 2007 or if you are already registered and your land holdings have changed, you will need to lodge a change of registration details form. 

On lodgement of the registration form, or if you are already registered, a 2007 Notice of Land Tax Assessment will be issued by the Office of State Revenue. If necessary, an objection can be lodged within 60 days of receipt of the assessment.

There are numerous exemptions & concessions available.

Note: Land Tax varies from state to state. Consult your local office for details or visit the Office of State Revenue website.

(www.osr.nsw.gov.au)

New PAYG Payment Summaries

The Australian Taxation Office has redesigned the PAYG Payment Summaries forms and will be available from April 2007.

The new A4 sized form now provides additional spaces for reporting purposes. It now also incorporates an amendment indicator to assist in the processing of previously lodged forms.

Source: (www.ato.gov.au)

Warning on time to act on Excess Superannuation Contributions

Taxpayers who made post tax superannuation contributions in excess of $1 million between 10th May 2006 & 6th December 2006 are reminded they need to apply to the Commissioner for authority to release the excess monies before 30th June 2007.

Those who neglect to apply for the release of contributions will be issued with an assessment for a liability of 46.5 per cent of the excess above the $1 million.

Taxpayers who made post tax superannuation contributions between 10th May 2006 & 30th June 2007 are reminded that they may apply to the Commissioner to disregard or reallocate the excess contributions to a different income year. This is only available in limited special circumstances. 

Source: (www.ato.gov.au)

When can the Commissioner allow  a claim for non-commercial business losses?

Generally, non-commercial business activities carried on by individuals cannot be deducted against other income unless certain tests are met.

However the Commissioner has the power to override these laws if they are seen to be unreasonable.

Draft taxation ruling TR 2007/D1 sets out such circumstances:

• where a taxpayer is suffering unexpected severe hardship; 
• experiencing abnormal trading conditions outside the taxpayers control;
• severe bushfire, drought, flood, crop plague.

This discretion can extend beyond the one year into the other years after the principle event when hardship is still being experienced.

The important point to note is that the Commissioner will only use his discretion in extreme circumstances.

 (www.ato.gov.au - Search: TR 2007/D1)

Your lost super is still out there

The tax office has reminded taxpayers of their “SuperSeeker“ service which can find an individuals lost superannuation. The search tool is available online at the address below.

(www.ato.gov.au/super)

When is a main residence not a main residence?

Landowners are generally exempt from NSW land tax on their principle residence. But is a main residence not a main residence?

In a recent AAT case, Pearse v Chief Commissioner of State Revenue, the tribunal heard that the taxpayer had purchased and resided in a heritage restricted cottage and applied for the main residence exemption.  

The heritage restricted home was not allowed to be occupied as a home and was deemed to be an illegal occupation against council regulation.

Since the house could not be lived in legally, the owners were not granted the exemption and the land did not meet the conditions of the principle residence exception.

(Pearse v Chief Commissioner of State Revenue (2007) NSW AAT)

NOTE: The above articles presented here are provided for information purposes only and are not to be treated as taxation or financial advice.