Income Tax Assessment Act 1997

Income Tax Assessment Act 1997 (colloquially known as ITAA97) is an act of the Parliament of Australia. It is one of the main statutes under which income tax is calculated. The Act is a rewrite in plain English of the prior Income Tax Assessment Act 1936. New matters are now generally added to the 1997 Act rather than the 1936 Act.

Income Tax Assessment Act 1997
Parliament of Australia
Assented to17 April 1997
Introduced byHoward Government
Status: In force

Highlights of the act are:

  • Section 8-1 — deductions for expenses incurred earning assessable income, this is the main section covering deductions.
  • Section 25-5 — tax deductibility of expenditure on managing tax affairs. This is a separate provision because such expenditure is not directly related to producing income.
  • Section 70-10 — the definition of "trading stock", including shares etc. held by someone in the business of buying and selling those.
  • Parts 3-1 and 3-3, being sections 100-1 to 152-425 — capital gains tax (CGT).
    • Section 104-5 — the set of events that give rise to CGT consequences.
    • Section 104-145 — liquidator declaring shares to be worthless (effective 11 November 1999).
    • Section 116-30 — gifts treated as disposals at market value.
  • Division 43 — building allowance, treated separate from other forms of depreciation.

In 2005, parliament added section 26-54 to the act in response to the ruling in Commissioner of Taxation v La Rosa, which gave a heroin dealer a tax deduction of $220,000 for money stolen from him during a drug deal. The new section denies deductions "incurred in the furtherance of, or directly in relation to, activities in respect of which the taxpayer has been convicted of an indictable offence".[1]

See also

References
  • Renton, N. E. (2005). Income Tax and Investment: A Plain English Guide for Shareholders and Property Owners (2nd ed.). Milton, Qld.: John Wiley & Sons. ISBN 0-7314-0221-9.
  1. Costello, Peter (29 April 2005). "Income tax deductions to be denied for illegal activities". Department of the Treasury. Retrieved 17 December 2018.
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