Taxation Laws Amendment (Landcare and Water Facility Tax Offset) Act 1998 (91 of 1998)

Schedule 1  

Part 1   Income Tax Assessment Act 1997

13   After Division 387

Insert:

[The next Division is Division 388.]

Division 388 - Tax offsets for primary producers and some land-holders

Table of Subdivisions

388-A Landcare and water facility tax offset

Subdivision 388-A - Landcare and water facility tax offset

Guide to Subdivision 388-A

388-50 What this Subdivision is about

If you can deduct under Subdivision 387-A or 387-B capital expenditure you incur on landcare operations or on facilities to conserve or convey water, you may be able (depending on the amount of your taxable income) to choose a tax offset, instead of a deduction, for up to $5,000 of the expenditure you incur on each of those things.

Note: You cannot choose a tax offset for expenditure incurred after the 2000-01 income year.

Table of sections

Operative provisions

388-55 Entitlement to the landcare and water facility tax offset

388-60 How much is the tax offset?

[This is the end of the Guide.]

Operative provisions

388-55 Entitlement to the landcare and water facility tax offset

(1) If you can deduct capital expenditure you incur in the income year under Subdivision 387-A (landcare operations) or Subdivision 387-B (facilities to conserve or convey water), you can choose a *tax offset instead for:

(a) a maximum of $5,000 of the expenditure you can deduct under Subdivision 387-A; and

(b) a maximum of $5,000 of the expenditure you can deduct under Subdivision 387-B.

Note: The part of the tax offset that is for expenditure you can deduct under Subdivision 387-B is spread over 3 income years: see paragraph 388-60(1)(b).

(2) But you can only choose the *tax offset if:

(a) assuming you had chosen a deduction instead of the tax offset, your taxable income for the income year would have been $20,700 or less; and

(b) the expenditure is incurred before the end of the 2000-01 income year.

(3) To the extent that you choose the *tax offset for expenditure, you cannot deduct that expenditure under Subdivision 387-A or 387-B (or under any other provision of this Act).

388-60 How much is the tax offset?

(1) Your *tax offset for an income year is the sum of:

(a) 34% of the expenditure for which you choose the tax offset that you incur in the income year that you could otherwise deduct under Subdivision 387-A (landcare operations); and

(b) 34% of 1/3 of the sum of the amounts of expenditure for which you choose the tax offset that you could otherwise deduct under Subdivision 387-B (facilities to conserve or convey water) for:

(i) the income year; or

(ii) the previous 2 income years.

(2) However, the *tax offset is subject to the tax offset carry forward rules in Division 65.

Note: This means that a tax offset that you cannot use in this income year can be carried forward to a later income year and may reduce the income tax that you would otherwise have to pay in that later income year: see Division 65.