XN000022-1974-11-15 — Page 3

FRIDAY, NOVEMBER 15, 1974

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THAT A CLAIM MADE FOR PERSONAL ASSESSMENT IS LIKELY TO REDUCE HIS ULTIMATE LIABILITY TO TAX, OR

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THAT THE AMOUNT OF ANY LOSS BROUGHT FORWARD FOR SET OFF HAS BEEN OMITTED OR IS INCORRECT, OR

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THAT HE HAS OBJECTED TO HIS ASSESSMENT TO PROFITS TAX FOR THE PRECEDING YEAR..

THE BILL CONTAINS PROVISIONS FOR A TRANSITIONAL ADJUSTMENT IN THE YEAR PRECEDING THE YEAR OF CHANGE (1974/75), AND FINAL LIABILITY FOR THAT YEAR WILL BE COMPUTED ON THE BASIS OF EITHER THE ACTUAL PROFITS OF THAT YEAR OR THE PROFITS OF THE PRECEDING YEAR WHICHEVER ARE THE GREATER. THIS FOLLOWS THE PRINCIPLE APPLIED TO THE YEAR OF TRANSITION WHEN THE BASIS OF ASSESSMENT OF SALARIES TAX WAS CHANGED TO THE CURRENT YEAR BASIS, BUT WITHOUT THE 115 PER CENT LIMITATION WHICH WAS APPLIED IN THE CASE OF SALARIES TAX.

THE BILL ALSO CONTAINS TRANSITIONAL PROVISIONS RELATING TO CAPITAL EXPENDITURE INCURRED IN A PERIOD WHICH, DUE TO THE CHANGEOVER IN THE BASIS OF ASSESSMENT, IS NOT A BASIS PERIOD. AT PRESENT, ANY CAPITAL EXPENDITURE IN SUCH AN INTERVAL PERIOD IS REGARDED AS EXPENDITURE IN THE SUBSEQUENT BASIS PERIOD AND RANKS FOR INITIAL ALLOWANCE WITH THE CAPITAL EXPENDITURE OF THAT PERIOD. UNDER THE BILL, HOWEVER, A DEDUCTION FOR INITIAL ALLOWANCE IN ANY YEAR OF ASSESSMENT WILL BE RESTRICTED TO CAPITAL EXPENDITURE ACTUALLY INCURRED IN THE BASES PERIOD, ALTHOUGH CAPITAL EXPENDITURE IN AN INTERVAL PERIOD WOULD SUBSEQUENTLY COUNT FOR ANNUAL ALLOWANCE.

THERE IS NO CHANGE IN THE PRINCIPLE THAT CAPITAL EXPENDITURE ON INDUSTRIAL BUILDINGS AND PLANTS AND MACHINERY, LESS ANY AMOUNT RECOVERED ON DISPOSAL, IS ALLOWED AS A DEDUCTION OVER A PERIOD OF TIME OR OVER THE WORKING LIFE OF THE PLANT, AS THE CASE MAY BE.

IF A BUSINESS SHOULD SUFFER LOSS IN A PERIOD PRIOR TO THE DATE OF CHANGEOVER (APRIL 1 1975) TO THE NEW BASIS OF ASSESSMENT AND IF THIS LOSS WAS NOT 35T OFF AGAINST PROFITS IN ANY ASSESSMENT BEFORE APRIL 1, 1975, THIS LOSS WILL DE CARRIED FORWARD AND SET OFF AGAINST PROFITS OF THE FIRST AND SUDSEQUENT ACCOUNTING PERIODS USED FOR ASSESSMENTS AFTER APRIL 1, 1975.

WHILE THE PERIOD APRIL 1 TO MARCH 31 WILL BE RETAINED AS THE YEAR OF ASSESSMENT, PROVISION IS MADE TO SUBSTITUTE A BUSINESS ACCOUNT YEAR AS THE YEAR OF ASSESSMENT. THIS PROPOSAL INVOLVES NO CHANGE OF CONCEPT AND MAINTAINS CONTINUITY WITH ESTABLISHED PRACTICE SINCE BUSINESSES WHICH HAVE BEEN THROUGH THE COMMENCEMENT PROVISIONS FOR ASSESSMENT ARE ALREADY ASSESSED ON THE BASIS OF AN ACCOUNTING YEAR.

THE BILL ALSO REVISES THE PROCEDURES FOR DEALING WITH CHARITABLE DONATIONS AND PROVIDES FOR THE PERMITTED 10 PER CENT OF ASSESSABLE INCOME OR PROFITS TO BE APPLIED BEFORE, RATHER THAN AFTER, ANY DEDUCTION FOR PREVIOUS LOSSES.

/OTHER FEATURES

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