Treasurer Announces National CompetitionCouncil AppointmentsDecember 15, 2000
Government Response to the Productivity Commission Report on Australia’s General Tariff ArrangementsDecember 19, 2000
|UNIFORM CAPITAL ALLOWANCE SYSTEM RELEASE OF EXPOSURE DRAFT LEGISLATION
the Government is releasing an exposure draft of legislation for the Uniform Capital
Allowance System (UCA). The UCA, announced by the Government on 11 November 1999,
will take effect from 1 July 2001. It will contain common rules for writing off
capital expenditures on the effective life basis and should significantly reduce the
existing volume of legislation.
The UCA will allow certain capital expenditures not currently deductible to be written
off over the life of the project to which the expenditure relates. These include
feasibility study costs, site preparation costs and environmental assessment costs. The
UCA also provides write off for a number of specific types of capital expenditure, such as
the costs of raising equity, establishing or converting a business structure and defending
against takeovers, which in the past were not deductible.
Following its announcement in November 1999, the Government has been consulting
about proposed enhancements to the UCA and, as a result, has made a number of changes that
will improve the UCAs operation.
The release of exposure draft legislation for the UCA provides the opportunity for
public comment and again demonstrates the Governments commitment to consult on the
implementation of its business tax reforms.
Under the UCA legislation, the existing immediate deduction for the cost of assets used
in exploration and prospecting will be retained. There will also be an immediate write off
from 1 July 2000 for depreciating assets costing no more than $300 used by taxpayers
predominantly in deriving non-business income.
In addition, the legislation provides greater certainty for taxpayers relying on the
effective lives of assets as determined by the Commissioner of Taxation. If the asset was
acquired or its construction started before 21 September 1999, taxpayers relying
on the Commissioners determination of effective life can rely on the determination
that applied when the asset was acquired or construction started. If the asset was
acquired or construction started after 21 September 1999, taxpayers can rely on
the Commissioners determination that applied at the time the asset was acquired or
construction started, provided they begin to use the asset or install it ready for use
within three years. Otherwise, they are able to rely on the effective life applying when
the asset begins to be used or is installed ready for use.
The exposure draft legislation, the explanatory statement and additional information
can be obtained from the Treasury website (www.treasury.gov.au/businesstax).
Comments on the exposure draft should be received by Monday 29 January 2001 and should be
Australian Taxation Office
PO Box 900
CIVIC SQUARE ACT 2608
or can be emailed to email@example.com.
Submissions will be treated as public unless the author indicates to the contrary.
Submissions lodged electronically will be published on the Treasury web site.
More information on the exposure draft can be obtained from the Treasury Tax Reform
Help Line on 13 63 20 or the Treasury website.
18 December 2000
Contacts: Gerry Antioch
(02) 6263 4477
Australian Taxation Office
(02) 6216 2039