Amendments to returns due to a revocation of an election will generally not attract penalties or GIC

The extension of time to revoke elections does not have any impact on due dates for income tax returns and for payment of income tax liabilities. However, if a revocation or change in election requires a taxpayer to amend their tax return and the amendment increases their liability, shortfall penalties and the GIC will generally not apply. On the other hand, if an amendment decreases a liability, the taxpayer may be entitled to interest on their tax overpayment.

We will observe the terms of ATO Practice Statement Law Administration PS LA 2005/9 in so far as it relates to amendments arising from the revision of elections. For example, provided a genuine attempt was made to correctly lodge the initial return, no shortfall penalty will apply to amendments made to the return because of a variation in the election. Similarly, no GIC will apply to that adjustment from the original due date until the return is lodged, provided the amended return is lodged within a reasonable period.

    Last modified: 20 Oct 2010QC 17844