10 Jul 088 Withdrawal of TD 2005/D17 (employee's deduction for decline in value of depreciating asset)On 9 July 2008, the ATO withdrew Taxation Determination TD 2005/D17 (Income tax: is an employee's deduction for the decline in value of a depreciating asset used for a taxable purpose affected by section 51AH of the Income Tax Assessment Act 1936, if they are subsequently reimbursed an amount for the cost of the asset by their employer?) with effect from the same day.
The draft determination is no longer relevant as the law has been changed so that, for depreciating assets acquired on or after 1 July 2008, s 51AH does not apply to deny employees' deductions under Division 40 of ITAA1997.
Note, however, that the law has also been changed so that, where an employer has provided an expense payment benefit or property benefit to which s 58X of the FBT Assessment Act 1986 applies, no deduction is available to the employee for the decline in value of the eligible work related item:
(a) in the 2007-08 and later income years, if the item was acquired after 7.30 pm by legal time in the Australian Capital Territory on 13 May 2008; and
(b) in the 2008-09 and later income years, if the item was acquired on or before 7.30 pm by legal time in the Australian Capital Territory on 13 May 2008.
For a copy of TD 2005/D17W, go here