31 Oct 14
On ATO website errors
MEMBER 169 writes:
We always enjoy reading your regular weekly dose of tax news and woes. Keep up the good work.
Recently, I was reading something on the ATO website, specifically "Deceased estate and capital gains tax QC 17206".
I was stunned by the glaring oversimplification contained in an important real-life example included in QC 17206.
Transfer of an asset from the executor to a beneficiary
Maria died on 13 October 2000 leaving two assets – a parcel of 2,000 shares in Bounderby Ltd and a vacant block of land. Giovanni was appointed executor of the estate (the legal personal representative).
When the assets are transferred to Giovanni as legal personal representative, he disregards any capital gain or capital loss. Giovanni sells the shares to pay Maria's outstanding debts. As the shares are not transferred to a beneficiary, any capital gain or capital loss on this disposal must be included on the tax return for Maria's deceased estate.
When all debts and tax have been paid, Giovanni transfers the land to Maria's beneficiary, Antonio, and pays the conveyancing fee of $5,000. As the land is transferred to a beneficiary, any capital gain or capital loss to date is disregarded. The first element of Antonio's cost base is taken as Maria's cost base on the date of her death. Antonio is also entitled to include in his cost base the $5,000 Giovanni spent on the conveyancing.'
Perhaps the author of this example is too young to remember the excitement of 19 September 1985, which might explain how they completely failed to consider whether Maria purchased the shares and/or vacant land before or after that date.
Doesn't the ATO have any process of quality control before these examples are published and released into the wild?
Maybe the ATO website authors should consider the crowdsourcing model used so successfully by Wikipedia. Wikipedia and ATO website are similar semi-technical blogs.
Is there any reliable channel to advise ATO of such errors?
Or maybe ATO doesn't care about errors in their blog since they know the only folk who read the ATO website are bored (and boring) old accountants."
TAXVINE COMMENT: Apart from the general feedback facility here, there does not appear to be any way to advise the ATO of errors on its website.