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Index numbers supplied by TR editor’s notes – ITAA 1997 Legislation Online

Under s 960-280 of the ITAA 1997, Thomson Reuters inserts an editor’s note supplying the index numbers published by Australian Bureau of Statistics from 1985 to the second quarter of 2013.

A significant number of provisions from the ITAA 1997 require amounts to be indexed by multiplying the amount by the indexation factor (this formula will always ask for the inclusion of an index number for a specific quarter).

The taxpayer needs the index numbers in order to calculate, among other scenarios, the car cost limit as a depreciable asset, the cost base of a CGT asset to determine the capital gain when the taxpayer chooses the indexation method or under certain circumstances, the tax-free component of genuine redundancy payments and for some superannuation calculations.

The Thomson Reuters editor also provides a note under s 61-30 of the ITAA 1997 where the dependant (invalid and carer) tax offset is calculated for the current financial year 2013-14 using the indexation factor in s 960-275(1).

By mid-year the new dependant (invalid and carer) tax offset was introduced by the Tax and Superannuation Laws Amendment (2013 Measures No 2) Act 2013, applying from the income year 2012-13. This new offset generally replaces the invalid spouse, carer spouse, child-housekeeper, invalid relative, parent or parent-in-law and housekeeper tax offsets.

By Luis Vazquez

Luis Vazquez is a Senior Editor at Thomson Reuters. He is in charge of several tax publications both in print and online including ITAA 1997 Legislation, Australian GST Handbook and Australian Trusts Tax Handbook.

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