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23 May 14 Guidance from ATO re repeal of measures associated with MRRT

The ATO has issued the following administrative guidance concerning measures that will be repealed when the MRRT is repealed. 

1. Discontinuing company loss carry-back 2013-14 income year:  Taxpayers, including those who use early balancing substituted accounting periods, who lodge a company tax return for the 2013-14 income year can self-assess under the existing law. Once the law is enacted, the ATO will amend the company tax return to disallow the claim for the loss carry-back tax offset for the 2013-14 income year. This will result in an increase in the taxpayer's tax liability. No tax shortfall penalties will apply and any interest attributable to the shortfall will be remitted to nil.

Here is a link to further information on the ATO website. 

2. Reduction of instant asset write-off threshold:  On and after 1 January 2014, taxpayers, including those who use early balancing substituted accounting periods, who lodge a tax return for the 2013-14 income year can self-assess under the existing law. Once the law is enacted, the taxpayer will need to seek an amendment to apply the new law. No tax shortfall penalties will apply and if the amendment is sought within a reasonable time, we will remit any shortfall interest attributable to the amendment to nil. Otherwise the shortfall interest will run from the date the change becomes law.

3. Discontinuing vehicle accelerated depreciation:  On and after 1 January 2014, the same as for 'Reduction of instant asset write-off threshold' applies.

At the time of writing, the proposed repeal of these measures had been rejected by the Senate. A future issue of TaxVine will advise members when the relevant Bill is passed.