ATO reminder: Second-hand depreciating assets and rental properties
The ATO has issued a reminder to tax-agents that (subject to certain exceptions) since 1 July 2017 their clients can’t claim the decline in value of “second-hand depreciating assets”, unless: the property is used for carrying on a business (eg a hotel); they are an excluded entity; or the property was rented out prior to this date. The ATO says that “second-hand depreciating assets” are depreciable items previously used or installed ready for use in a rental property such as assets that are already existing in a property when your clients purchased it or that are used in their private residence, before renting it out. Such assets can include: flooring, window covering; air conditioners, washing machines, alarm systems, spas, pool pumps; and items used for both the rental property and your client’s own home.
No PBI status for LGBTQI+ group – just yet!
In a majority decision, the AAT has ruled that an organisation that argued it was organised to carry out activities to promote the rights and acceptance of LGBTQI+ people was not entitled for registration as a “public benevolent institution” (PBI). The majority so ruled on the basis of finding that it was not in fact carrying out relevant activities for this purpose for the relevant period – notwithstanding that there was unanimous agreement that the cause was, in principle, capable of meeting the requirements for registration as a PBI. The majority concluded that the organisation had “not established that, during the relevant period, there was a sufficiency of connection that justified a finding it was entitled to be registered as a charity with the subtype public benevolent institution. On the face of the evidence, it remained eligible to be registered as a charity with the purpose of ‘advancing public debate’. But we leave for another day the question of whether [it] will become eligible to be registered as a public benevolent institution in subsequent years once the other activities it has foreshadowed come online”. (Equality Australia Ltd and Commissioner of the Australian Charities and Not-for-profits Commissioner [2023] AATA 2161, 30 June 2023)
ATO: Treatment of working holiday makers
The ATO has issued information to work out when working holiday makers (WHMs) who are Australian residents for tax purposes are taxed as Australian residents. Broadly, it states that WHMs may be taxed on the same basis as a resident Australian national if they are both: from a non-discrimination article (NDA) country, and an Australian resident for tax purposes. But the ATO also states that most WHMs are foreign residents for tax purposes. The ATO information also deals with how to lodge or amend a tax return as a working holiday maker and how to vary PAYG withholding.
