This Draft Ruling, released on Wed 4.12.2013, considers apportionment, for the purposes of s 8-1 of the ITAA 1997, of a loss or outgoing incurred by a superannuation entity partly in gaining or producing assessable income and partly in gaining or producing non-assessable income.
The Draft Ruling states that an expense incurred by a superannuation entity in gaining or producing non-assessable income is not deductible under s 8-1. However, it states that subject to any exclusions under s 8-1(2)), an expense incurred in partly gaining assessable income and partly gaining non-assessable income may be deductible.
According to the Draft, the correct method for apportioning an expense incurred in partly gaining assessable income and partly gaining non-assessable income depends on particular circumstances. In particular, whether the expenditure can be readily distinguishable into parts. The Draft also includes 5 detailed examples outlining the apportionment methods in different circumstances.
DATE OF EFFECT: When the final Ruling is issued, it is proposed to apply to expenses incurred on the first day in the first income year of the super entity that commences on or after 1 July 2014.
COMMENTS are due by 29 January 2014. ATO contact: Penny Dally – Tel: (08) 8208 1803; Fax: (08) 8208 1094; Email: Penny.Dally@ato.gov.au.
[LTN 235, 4/12/13]