The Tax Institute welcomes the opportunity to make a submission to the Australian Taxation Office (ATO) in relation to Draft Taxation Ruling TR 2021/D5: Income Tax “ expenses associated with holding vacant land (Draft Ruling).
In the development of this submission, we have consulted with our SME and Tax Practitioner Technical Committee to prepare a considered response which represents the views of the broader membership of The Tax Institute.
Broadly, the Draft Ruling provides a practical and useful guide for taxpayers seeking clarity around the operation and application of s 26-102 of the Income Tax Assessment Act 1997 (ITAA 1997). However, there are some areas that we consider require further guidance and examples from the ATO, including the application of the provisions to vacant land purchased by Special purpose investment vehicles that are not exempt under s 26-102(5) of the ITAA 1997.