Document ID: chunk:federal_register_of_legislation:C2004A00846:clause:1_1:p3
Version: federal_register_of_legislation:C2004A00846
Segment Type: clause
Provision Reference: sch 1 cl 1 (pt 3/21)
Character Range: 6658–9337

previous year. It was included in her assessable income for that previous year because she was using an accruals basis of accounting.

 That amount is not again included when Sylvia receives it in the 2005‑06 income year.

 (3) Any *ordinary income that you received, but had not *derived, before you became an *STS taxpayer is included in your assessable income for the income year you became an STS taxpayer.

General deductions etc.

 (4) Any *general deductions, and deductions under section 25‑5 or 25‑10, that you incurred but did not pay, and were deductible, before you became an *STS taxpayer are not again deductible when you pay them.

Example: To continue the example, Sylvia incurred business expenses of $12,000 in the 2004‑05 income year. She did not pay these expenses until the next income year.

 The expenses were deductible for the 2004‑05 income year because she was using an accruals basis of accounting. That amount is not again deductible when she pays it in the 2005‑06 income year.

 (5) You can deduct for the income year you became an *STS taxpayer any *general deductions, and deductions under section 25‑5 or 25‑10, that you paid, but did not incur, before you became an STS taxpayer.

Note: Section 8‑10 prevents double deductions in respect of the same amount.

Trading stock

 (6) You can deduct for an income year for which you are an *STS taxpayer an amount you incurred and paid before that year if:
 (a) the amount was incurred in connection with acquiring an item of *trading stock; and
 (b) you could not deduct the amount before that year because of section 70‑15; and
 (c) the item becomes part of your trading stock on hand during that year.

328‑115  When you stop being an STS taxpayer

 (1) This section sets out what happens to your *ordinary income and *general deductions, and deductions under section 25‑5 or 25‑10, when you stop being an *STS taxpayer for an income year (the changeover year).

Ordinary income

 (2) Any *ordinary income that, apart from paragraph 328‑105(1)(a), you would have *derived before the changeover year (while you were an *STS taxpayer) and you have not included in your assessable income because you have not received it is included in your assessable income for the changeover year.

Example: Sonja's Shoe Shop is an STS taxpayer for the 2003‑04 income year, but is forced to leave the STS for the 2004‑05 income year because of increased turnover. After leaving the STS, the business changes its accounting method to an accruals basis.

 The customers of Sonja's Shoe Shop owe $10,000 at the end of the 2003‑04 income year. That amount is not included in assessable income for that income year