The little devil in the detail
Budget 2011 takes aim at “planes, boats and holiday homes”
“There’s a little tax devil in the detail of Budget 2011 around future policy reform targeted at mixed use assets – read as planes, boats and holiday homes,” says Thomas Pippos, managing tax partner at Deloitte.
“The current rules that apportion certain activities as between their private and business components could be the subject of a major rethink,” Pippos says.
Rightly or wrongly, this is only going to end one way for impacted taxpayers: they are going to end up paying more tax as the review won’t be looking to make such assets fall more easily into the tax base, he says.
The Budget provides scant detail on the actual initiative and certainly nothing in terms of the substance of any reforms, but taxpayers need to be aware that current practice could easily be short-lived if officials develop the type of rules that could find favour with the legislators.
“An interesting consultative document will eventually find its way into the public arena on this topic.”