TAX DEDUCTIONS

For those who have not already rushed to submit tax returns on the first of July here are some interesting tips which might assist in preparation: * New legislation has been introduced to provide for deductions of $2.00 up to $1,500.00 annually for contributions to registered political parties and gifts to independent candidates and members. *The new rates for car expense claims of up to 5,000 business kilometres are as follows for conventional engine vehicles (for rotary driven cars, halve the engine capacity):- *up to 1600cc – 45.7c/ km *1601 – 2600cc – 51.9c/ km *over 2601cc – 53.8c/ km *The costs price limit for car depreciation remains at $55,134 for 1997/98, unchanged from the previous two years. Depreciation cannot be claimed for any part of the cost of a car which exceeds that limited. Superannuation thresholds/limits *aged based deduction limits for superannuation are $10,600, $29,443 and 73,019. *The reasonable benefit limits are $471,088 lump sum and $942,175 for pension. *The surcharge threshold for the purposes of both superannuation contributions tax and the termination payments tax is $75,856. *The surchargeable contributions threshold for the purposes of the superannuation contributions tax is $2,529. CGT NEWS The ATO has withdrawn a determination which implied that a forfeited deposit under a contract of sale is subject to capital gains tax. A recent Court decision in Guy’s case has no doubt contributed to the ATO’s actions. The current position is therefore that CGT does not apply to a deposit under a standard contract for the sale of land. Maria Townsend mariat@gells.com.au

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