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Greg acquired a rental property on 1 July 1998 for $300,000 and makes improvements of $50,000. Before disposing of the property on 30 June 2011, he had claimed $20,000 in capital works deductions. At the time of disposal, the cost base of the property was $350,000. The reduced cost base of the property is reduced by $20,000 to $330,000.
A business operator cannot claim capital allowances for things bought or sold: these are claimed as business expenses. If a business asset is bought on a hire purchase basis, the original cost of the item can be claimed as a capital allowance, but the interest and other charges count as business expenses.
Income taxes are the most significant form of taxation in Australia, and collected by the federal government through the Australian Taxation Office (ATO). Australian GST revenue is collected by the Federal government, and then paid to the states under a distribution formula determined by the Commonwealth Grants Commission.
Property income represents the return for the supply of both physical capital and financial capital. Capitalist economic systems are usually defined as those systems where the means of production are privately owned through equity , stock , bonds or privately held by a group of owners who bear the risk of investment and production to generate ...
Business expenses include all manner of costs for the benefit of the activity. An allowance (as a capital allowance or depreciation deduction) is nearly always allowed for recovery of costs of assets used in the activity. Rules on capital allowances vary widely, and often permit recovery of costs more quickly than ratably over the life of the ...
Expenses of the superannuation fund, such as administration expenses, investment management expenses and insurance premiums, are allowable deductions against the fund income. Life insurance premiums paid by the fund are also deductible by the fund from assessable income; while the same premium if paid directly by the individual member may not ...
The Australian Taxation Office (ATO) is an Australian statutory agency and the principal revenue collection body for the Australian Government. The ATO has responsibility for administering the Australian federal taxation system , superannuation legislation, and other associated matters.
i. ability to negatively gear an investment property when there is little prospect of the property being cash-flow positive for many years; ii. the benefit that investors receive by virtue of the fact that when property depreciation allowances are "clawed back" through the capital gains tax, the rate of tax is lower than the rate that applied ...