2016 was quite an incredible year

It was also another busy year for Napier & Blakeley, with our independent trusted advisory services again being in great demand from both local and offshore clients investing in Australia and SE Asia.

In 2016, we managed client projects across all states and territories of Australia and also in Singapore, Hong Kong, Indonesia, Sri Lanka, Fiji, The Maldives, Guam and New Zealand.

We would like to say a big thank you to all of our clients and send all of you and your families our Season’s Greetings.  We look forward to working with you again and to a successful and prosperous 2017 for all.

Our offices will close at 5pm on Friday 23rd December and reopen on Monday 9th January.

Should you have any urgent business during that time, please contact our Managing Director, Alastair Walker on 0419 503 289 or at awalker@napierblakeley.com.

For 31 years and counting Napier & Blakeley have been providing the following services to the property industry:

• Property Acquisition & Disposal Technical Due Diligence
• Property Development Due Diligence
• Quantity Surveying
• Capital Expenditure Forecasting
• Make Good Reporting
• Energy Management
• Development Monitoring
• Property Tax Depreciation

Please contact any of the people below for more information or assistance:

SYDNEY
Alastair Walker
Managing Director
o.   02 9299 1899
m.  0419 503 289
e.   awalker@napierblakeley.com

MELBOURNE
Craig Smith
Director
o.   03 9915 6300
m.  0407 371 664
e.   csmith@napierblakeley.com

BRISBANE
Paul Mazoletti
National Director
o.   07 3221 8255
m.  0408 749 202
e.   pmazoletti@napierblakeley.com

PERTH
Graham Rigby
Senior Associate
o.   08 9489 4895
m.  0419 847 998
e.   grigby@napierblakeley.com

Our National Tax Director, Paul Mazoletti is pleased to advise he will review over the Christmas break and respond to the ATO with comments accordingly.

In the meantime please ensure you all have a safe holiday and lovely Christmas on behalf of the team at Napier & Blakeley.

Proposed new determinations

They propose to add the following list of effective life determinations to the Commissioner’s schedule to apply to assets purchased (or otherwise first used or installed ready-to-use) on or after 1 July 2016 (within the meaning of section 40–95 of the Income Tax Assessment Act 1997).

A related entry in Table A of the Commissioner’s schedule is proposed as follows:

They are seeking comments on a draft list of Effective Lives they are releasing for assets used in Transfer Stations and Landfill services.

Proposed new determinations

They are proposing  to add the following list of Effective Life determinations to the Commissioner’s schedule to apply to new assets either purchased and first used, or installed ready to use, on or after 1 July 2015 (within the meaning of section 40-95 of the Income Tax Assessment Act 1997). The effective life listed below for each asset basically determines the depreciation rate e.g.: 20 life years = a basic rate of 5% per annum can be claimed on the cost of the item to the income producing taxpayer.

# A capped effective life of 10 years is available for trailers having a gross vehicle mass greater than 4.5 tonnes – see subsection 40-102(4) of the Income Tax Assessment Act 1997.

Comments

If you have an interest in these draft Effective Lives, the ATO invites you to comment. If you disagree with a proposed Effective Life, tell them why a different effective life should be recommended.  We can pass on your comments to the ATO.  Email us at property@napierblakeley.com.

Contact

If you have built, bought or sold any property in the last 12 months, you may need an updated report to reflect your Effective Lives in the Transfer Stations and Landfill Services sector or any other sector.

The ATO continually update and analyse industry sectors, and thus so do we.

Contact us now and ensure you are maximising your expenditure to its potential:

Paul Mazoletti
National Director – QLD
M: 0408 749 202
E: pmazoletti@napierblakeley.com

Peter Osborn
Director – NSW
M: 0439 765 571
E: posborn@napierblakeley.com

John Mathew
Director
M: 0414 559 326
E: jmathew@napierblakeley.com

The Commissioner has made a determination of the effective life of certain depreciating assets. This will take effect from 1 July 2013. If you have your property or business in the following ANZIC categories this will affect reporting on your new purchases after July 1 2013 of Division 40 Plant/Assets.

Industries and industry activities affected are:

• Ammonia and ammonium nitrate manufacturing (fertiliser, dyes, herbicides)
• Meat processing (beef, pig & sheep abattoirs – not chicken)
• “Non-ferrous metal casting (aluminium)
• Pet food manufacturing (canned, bird feed, cereal for fodder, sheep lick)
• Prefabricated concrete manufacturing (precast walls, panels)
• Sanitary paper product manufacturing (toilet paper, tissues, napkins)

Determinations made by The Commissioner for the effective life and depreciation assets, has been applied for the purpose of provisions under division 40, which will be effective in the life of depreciating assets. This will be used to work out the assets decline in value.

The above Ruling also discusses the methodology used by the Commissioner of Taxation in making a determination of the effective life of depreciating assets under section 40-100 of the Income Tax Assessment Act 1997 (ITAA 1997).   It is important to note that effective lives for various items commonly found in commercial real estate has also been amended as a result of TR 2013/14.

If a depreciating asset has been purchased for use within a five year period, the effective life that will apply is the one in force from the date the depreciating asset is first used or installed.

The effective life determination and the period of the depreciating asset can be used for the purpose specified in subsection 40-100(5) (a specified purpose3). This can be used for taxable purposes and deductions may be available under Division 40 for the depreciating assets decline in value (see section 40-25).

Napier & Blakeley were the first to prepare audited depreciation schedules in Australia and we continue to keep our knowledge and experience current for our client’s benefits.

Contacts

Property Depreciation & Insurance
John Mathew – 03 9915 6300 – jmathew@napierblakeley.com
Peter Guerra – 02 9299 1899 – pguerra@napierblakeley.com
Peter Osborn – 02 9299 1899 – psoborn@napierblakeley.com
Paul Mazoletti – 07 3221 8255 – pmazoletti@napierblakeley.com

Transaction & Asset Advisory
Rob Howells – 03 9915 6300 – rhowells@napierblakeley.com
Alastair Walker – 02 9299 1899 – awalker@napierblakeley.com
Gavin Peach - 02 9299 1899 – gpeach@napierblakeley.com

Sustainable Property Solutions
Peter Frith – 03 9915 6300 – pfrith@napierblakeley.com

Development Advisory & Quantity Surveying
Craig Smith – 03 9915 6300 – csmith@napierblakeley.com
Peter Hammond – 02 9299 1899 – phammond@napierblakeley.com
Paul Cosker – 07 3221 8255 – pcosker@napierblakeley.com

Let us assist you with depreciation tax deductions

Why pay too much tax ? and improve your cash flow at the same time, it’s a no brainer !

It’s the end of financial year again and if you own investment property, you should claim the available depreciation and building allowance deductions.

If you are not sure what to claim we will assist you, no matter how large or small your investment property is, we have analysed every type of property and can guarantee that we will generate significant tax saving for you and that the payback on our fees will be very short and maybe only a matter of months.

Napier & Blakeley introduced this service into the Australian investment property market in 1985 and are still today the market leaders in this field.

Napier & Blakeley’s depreciation professionals are all ATO certified registered tax agents.

Our knowledge is second to none and before we charge you any fees we will assist you with what information you need and tell you approximately how much in deductions your investment property should generate.

Property Tax Deductions are available as follows:

• Depreciation of plant – such as air conditioning and mechanical ventilation, some electrical items, carpets, lifts, furniture and fittings.
• Building Structure (capital allowances) for investment properties constructed after July 1982, or for refurbishment, renovations, additions alterations after that date.

Now answer these questions…

1. Have you got a current depreciation schedule? If not Napier & Blakeley are qualified to establish values for the depreciating assets that you own.
2. Have you bought an investment property throughout the tax year?
3. Have you altered, renovated or added to your existing investment property throughout the tax year?
4. Have you demolished all or parts of your investment property?
5. Have you changed, added to or thrown out any items of fitout or FF & E during the financial year?

The establishment of a compliant depreciation schedule allows you to calculate your entitlements to Depreciation and Capital Allowances deductions and to manage the process of change to your asset.

Contacts

Call Napier & Blakeley today for assistance with your tax depreciation schedule or any other Napier & Blakeley services at any of our offices below:

Property Depreciation & Insurance
John Mathew – 03 9915 6300 – jmathew@napierblakeley.com
Peter Guerra – 02 9299 1899 – pguerra@napierblakeley.com
Raymond Yen – 02 9299 1899 – ryen@napierblakeley.com
Paul Mazoletti – 07 3221 8255 – pmazoletti@napierblakeley.com

Transaction & Asset Advisory
Rob Howells – 03 9915 6300 – rhowells@napierblakeley.com
Alastair Walker – 02 9299 1899 – awalker@napierblakeley.com

Sustainable Property Solutions
Peter Frith – 03 9915 6300 – pfrith@napierblakeley.com

Development Advisory & Quantity Surveying
Craig Smith – 03 9915 6300 – csmith@napierblakeley.com
Peter Hammond – 02 9299 1899 – phammond@napierblakeley.com
Paul Cosker – 07 3221 8255 – pcosker@napierblakeley.com

The question arises where funds from a third party such as an insurer pays for capital works.

No Insurance 
Where there is no insurance claim, then all demolished capital items may be written off from the date of demolition.  All newly installed and refurbished costs may be claimed once works have been completed.
Tip – ensure you keep all records of expenditure including all associated on costs such as skip hire, professional fees and the like. 

Insured asset replacement
Depreciation is broken into two main components being Division 40 and 43.  Each of these elements need to be adjusted separately.

Division 43 (Buildings)
Consideration needs to be made as to the value of money received to replace the asset and the written down value at the time of destruction.  If the value of the insurance payout is greater than the written down value then no balancing adjustment (write off) is available.  The new asset is eligible to claim Division 43 deductions.

View a Legal case for Division 43

 Division 40 (Depreciating assets or plant and equipment)
If a replacement asset is provided then the taxpayer can choose to apply the money received to reduce the cost base of the replacement asset.  This means that the destroyed asset may not have been written off but the new written down value of the asset after adjustment may be depreciated.
Tip – timing is important when applying this relief. 

i.e. a table with a written down value of $100 is destroyed by flood.  The taxpayer receives an insurance payout of $150, used to acquire a new table.  The taxpayer can choose not to treat the $50 as income, but to use the amount to reduce the cost base of the replacement to $100. 

It is important to identify the assets within your existing schedules that are/have been removed so as to ascertain their value at the time of removal.

Napier & Blakeley’s services are tailored to each clients needs when it comes to maintaining accurate depreciation schedules and asset registers –  it is a service we call Property Tax Profiling (PTP^TM).

Napier & Blakeley are the foremost provider of tax depreciation schedules throughout Australia providing not just value for money but the very best returns.

Please do not hesitate to contact us for all of your depreciation needs.

Queensland – Paul Mazoletti
0408 749 202
pmazoletti@napierblakeley.com

South Australia - John Mathew
0414 559 326
jmathew@napierblakeley.com

The above information relates only to properties used to derive an income.  As with all situations relating to tax you must ensure that you receive specific advice based on your circumstances, this information is general in nature and should not be solely relied upon.

Napier & Blakeley services:

• Tax depreciation estimates
• Tax depreciation schedules
• Asset registers
• Technical due diligence
• Condition assessments
• Make good assessments
• Capital expenditure forecasting
• Insurance replacement costs assessments

QLD /  NT  -  Paul Mazoletti – 07 3221 8255
NSW / ACT / WA / NZ  -   Alastair Walker - 02 9299 1899
VIC /  SA  / TAS  -  Peter Frith,  John Mathew -  03 9915 6300