ATO focus on 2007 Tax Returns

The Tax Office has advised that it will be paying particular attention to the following in 2006/07:

• Capital gains from assets sold to contribute to superannuation;
• Capital returns on shares, and capital gains or losses on share buy-backs; and
• Work related expenses (WREs), including motor vehicles, self-education, home-office, and travel expenses.

Occupations targeted

Each year, the ATO selects a number of occupations for specific focus because they have above average WRE claims, a high number of WRE claims or because the ratio of WRE claims is high compared to the salary and wages. For 2007, the ATO will focus on:

• tourism, travel consultants and guides;
• fitness and sporting industry employees;
• construction tradespeople who are employees;
• guards and security employees; and
• a continued focus on mining site employees.

Rental property deductions for 2007

In 2007 returns, the ATO will be looking at:

• renovations claimed as repairs – such as remodelling of bathrooms and kitchens;
• claiming too much interest on loans that have a private component;
• claiming the full cost of an inspection visit when it is combined with a private purpose;
• claiming deductions for properties only available for rent for part of the year;
• claiming the cost of land as a capital works deduction; and
• claiming depreciation on assets such as fixtures, instead of capital works deductions.

If any of the above areas are of concern, please contact this office.