1 Can you, claim a deduction in your 20YY-YY income tax return for state land tax liabilities relating to the 20YY to 20YY land tax years, which were assessed and paid in the 20YY-YY income year?
1 No. Question 2 If answer to question 1 is no, can the Commissioner allow amendments to prior income years (beyond the standard amendment period) in order to claim those deductions? Answer 2 Yes. This ruling applies for the following periods : Year ended 30 June 20YY Year ended 30 June 20YY Year ended 30 June 20YY Year ended 30 June 20YY Year ended 30 June 20YY Year ended 30 June 20YY The scheme commenced on: DD MM YYYY
You are an Australian citizen who has been a non-resident for tax purposes since MM 20YY. You jointly own an investment property at XXX, XXX. Taxpayer 1 separately owns an investment property at XXX, XXX. Both properties have been continuously rented and generating assessable rental income since: Property 1 - first rented DD MM 20YY Property 2 - first rented DD MM 20YY You relied on your property manager to handle Australian property matters. You were unaware of your state land tax obligations. On DD MM 20YY, you received correspondence from the State Revenue Office (SRO) advising that land tax assessments had been issued retrospectively for land tax years 20YY to 20YY. Upon receiving the notice, you immediately paid all outstanding liabilities in full during the 20YY-YY income year, as follows: • $XXX for the jointly owned property (Customer No. XXX) • $XXX for the individually owned property (Customer No. XXX) In addition, land tax for 20YY-YY was paid through automatic debits totalling $XXX, bring the total land tax paid in the 20YY-YY income year to $XXX.
Income Tax Assessment Act 1997 section 8-1 Taxation Administration Act 1953 section 14ZX
Question 1 Can you, claim a deduction in your 20YY-YY income tax return for state land tax liabilities relating to the 20YY to 20YY land tax years, which were assessed and paid in the 20YY-YY income year? Summary No, you cannot claim a deduction for land tax liabilities relating to the 20YY to 20YY land tax years in your 20YY-YY income tax return. Detailed reasoning Land tax Land tax liabilities may be deductible, depending on when the land tax liability arises. The timing of when you incur a liability to pay land tax will depend on the relevant state legislation. Your liability to pay land tax does not rely on the lodgement of a land tax return or on the taxing authority issuing a land tax assessment. In many states, the year in which the property is used for the relevant purposes determines when you're liable, even if an assessment does not issue until a later date. When you receive land tax assessments in arrears, the amount of land tax isn't deductible in the income year in which you pay the arrears. The land tax amounts are deductible in the respective income years to which the liability for the land tax relates. Question 2
If answer to question 1 is no, can the Commissioner allow amendments to prior income years (beyond the standard amendment period) in order to claim those deductions? Summary Yes, as the 20YY to 20YY income year notice of assessments are outside the 2-year amendment period, you will need to lodge an objection for this to be considered. You should include an explanation of why the objection was lodged late. While the time limit for lodging amendments and objections is the same, you can request an extension of time to lodge an objection in some circumstances. You can submit more than one amendment request within a review period. Detailed reasoning Under section 14ZX of the Taxation Administration Act 1953 the Commissioner will consider this request and decide whether to agree to it or refuse it. If the Commissioner decides to agree to the request, the objection is taken to have been lodged with the Commissioner within the required period. If the Commissioner decides to refuse the request, a taxpayer may apply to the Tribunal for review of the decision.