Capital gains in ATO’s sights

THE Association of Chartered Certified Accountants has followed Australian Taxation Office auditing advice last month with a reminder that rental and capital gains income is in the sights of the ATO.

The ACCA says ATO research has revealed deductions had overtaken income from rental properties by $600,000 by June 1 this year.

The ATO is likely to require 10,000 property owners to justify their deductions this year, with a special focus on claims for repairs that the ATO deems are capital improvements.

Capital gains, interest and dividends income will also come under special scrutiny, via the ATO’s new sophisticated data matching system.

Share trading, bank, financial institution and Centrelink data will be crosschecked with information supplied on tax returns.

However, ACCA Australia and New Zealand head Richard Francis advises: “Don’t panic if the tax man knocks at your door – as long as you follow the ATO’s advice, are honest in your claims and keep accurate and detailed financial records the process shouldn’t be too painful”.

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AUSTRALIAN Securities and Investments Commission-licensed managed investment scheme operators can now manage Hong Kong Securities and Futures Commission-authorised funds without having to apply for separate registration.

ASIC and the Hong Kong SFC signed a memorandum of understanding last month, entitled Declaration on Cooperation and Supervision of Cross-Border Investment Management Activity.

The MoU enables ASIC and the Hong Kong SFC to exchange information and assistance concerning the activities of fund managers licensed in one jurisdiction and also operating in the other.

Last year ASIC re-released a discussion paper on principles for cross-border financial services recognition, in preparation for a foreign financial service providers policy, as yet to be announced.

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NORWEST Energy has moved from explorer to oil producer, buying into the onshore Perth Basin Jingemia oilfield. The company is paying Pancontintental Oil and Gas $702,900 for its 1.278 per cent interest in the field, which has already undergone production testing.

Prior to this deal, Norwest agreed to sell an option over one of its offshore northern Perth Basin interests, freeing itself of cash requirements to maintain an interest in deepwater permit WA 226P.

The sale gives buyer, Sydney-based Roc Oil, interest in six contiguous offshore permits.

Roc will fund Norwest’s portion – 7.5 per cent – of a recently completed 3D seismic survey.

This will be capped at $525,000, and if Roc takes up the option, the company will pay $200,000 cash before the proposed drilling of a second permit well.

The first well, Morangie 1, was drilled last October, and showed residual oil. On any commercial discovery in this permit, Roc will pay Norwest $375,000.