Sustainable rural water use and infrastructure program

On 18 February 2011, the government announced it would seek amendments to the Income Tax Assessment Act 1997 to eliminate the timing discrepancy between when payments are taxed and when deductions are available for grant applicants under the Sustainable Rural Water Use and Infrastructure Program (SRWUIP). A capital gains tax exemption for payments under the SRWUIP would form a part of the measure.

The proposed changes will be backdated to 1 April 2010.

Media release

For more information, refer to the following media releases:

  • Media release no 073/2012External Link issued on 13 July 2012 by the Assistant Treasurer
  • Joint media releaseExternal Link issued on 18 February 2011 by the Minister for Sustainability, Environment, Water, Population and Communities and the Minister for Regional Australia, Regional Development and Local Government Minister for the Arts.

Legislation and supporting material

The following legislation received royal assent on 28 June 2013;

Administrative treatment

If a taxpayer lodges a return in accordance with the existing law, once the legislation is enacted, they should seek an amendment to adjust their return as appropriate. Interest on overpayments will be payable on any refund received.

If a taxpayer anticipates the changes, we will not be undertaking any specific compliance activity at this time. If a taxpayer anticipates the change correctly, they will not need to take any further action once the legislation is enacted.

If a taxpayer does not anticipate the changes correctly, they will need to seek an amendment of their earlier assessment.

If a taxpayer acted reasonably in anticipating this change and, as a result of an amendment to their earlier assessment, they have an increased liability, there will be no tax shortfall penalty. If they then actively seek to amend their return within a reasonable time, we will remit the general interest charge (GIC) attributable to the amendment to nil. Otherwise, the full GIC will apply from the date the change becomes law.

More information

For more information refer to:

    Last modified: 08 Aug 2013QC 25174