Between 18 July 2010 and 16 September 2012 all properties that have been claiming Div 43 allowances at a rate of 4% will cease to have an available deduction. There are many accountants who have not taken this into account and kept track of the start date of the the claims. 25 years seemed a long way away back in 1985 to 1987. I am sure many accountants will be caught out and it will make an easy audit target for the ATO.
We updated our permanent files on all clients with rental properties a couple of years ago with this in mind and we were shocked by the number of rental properties that our clients actually have and that we prepare tax schedules for.
There have been some useful ATO IDs and rulings in relation to DIV 43 allowances released in the past year or so. Especially clearing up the possibility of still having to reduce the cost base of an asset for whichj Div 43 deductions were available, even if they had not been claimed. This IS the case, but only up until the amendment period of 4 years. Prior to 4 years the cost base does not have to be reduced. I am sure this ruling will save accountants from being sued for many thousands of dollars by unhappy clients. This is despit the fact that the accountant may have advised them to obtain a QS report and they chose not to because of the cost.
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