Thread: Will we be taxed on money we don't spend?

With any luck the Storm will take up all their time for the next few years
Cheers,
Jim

First you need the FULL details.

Next blame the people who complained that they wanted to sell their "E" electricity to the suppliers for a higher price than the electricity that they buy.

This separated the generation and sale from self use.

Any product sold is subject to tax in one form or another.

End of story......

Originally Posted by artme

Will we be taxed on the water we collect in tanks and therefore don't buy?

Don't laugh too loud, that very notion has been floated by councils & state Government for some time now. Essentially the idea is just to slap a meter on the outlet from your rainwater tank & bill you per kl. The only reason its not in effect is that same backlash from voters - & the difficulty of enforcing/recording usage.

Originally Posted by artme

So the Krudd government is allowing the tax office to have ultimate say over the payments made for selling green energy to the grid!

Selling the surplus energy that you generate to your electricity supplier is income and subject to income tax.

Failure to declare this will result in a tax audit. They will know about you because the electricity supplier will declare it and they will have records if you received any government subsidy for the installation.

Pensioners and any other Centrelink customers will have to declare this, like other income, to them as well and may affect their benefits.

Peter.

David, I did say that what is being mooted is technically right. I also said, and this is as I understand it, not everyone will be treated in the same way. If this is the case it is certainly unfair.

Penny wong neatly sidestepped the issue by saying that they only subsidized the provision and installation of the hardware. This is correct. What the energy companies do with the generated power is up to them.

Perhaps this is another example of the government not sorting out all the implications and not consulting widely enough before taking action.

My main concern really is the effect it will have on the promotion and take-up of solar energy.

"Will we be taxed on money we don't spend?"

Effectivly some (perhaps all) are being taxed on savings - it's called deeming.
From 20 March 2010 the deemed interest rates are 3% up to $42000 and 4.5% over that amount. This is applied to Asset tested pensions and applies to EVERY dollar one may have in a bank.

soth

so under that system the money would eventually all be taken through taxation. Are you sure it's not the interest the money earns? But that's always been taxed.
My grandfather stashed about 20K in his shed because he didn't trust banks.

The big question is

If you sell power from Solar panels back to the electricity supplier does that make your house you live in a Income Earning Asset .

If this is the case then you would be required to pay Capital Gains tax when you sell it.

Yes you would increase the purchase price of the house by the cost of installation but the tax could be huge. You could then argue you only earned income from the panel XX amount of years and owned it YY amount of years so the capital gains is on proportional.

Then there is the deeming factor - the money you could have earn if you had fitted the panels??

Just a thought.

Cheers

Mick, you are right but most bank accounts do not attract the % deemed. I've declared my bank deposit to average $400+ and pay $0.51 per pension period - I don't recieve any interest at all. At the moment I have less than $100 and still pay a deemed amount at $400+.

sooth

If the income from the solar panels is to be taxed, then the cost and maintenance of the solar panels should be a tax deduction. However, the majority of pensioners do not submit a tax form so they stand to be discriminated against.

As everyone has shown here there is scope for a whole range of scenarios to arise and therefore for the gvernment and its agencies to regulate and charge in all sorts of ways.

Perhaps the Henry Review of the tax system will clear up some of these things.

It seems that every time something sensible is encouraged then one level of government or another will complicate things and I fear that this will happen here.

Another point that arises is the possibility that, despite the tnstallation of solar panels, some people will not decrease their use of grid power. I have already been told by a couple of people that they are simply taking advantage of the free electricity that comes their way via the panels, so their consumption of electricity actually rises.

I thought that one reason for the state goverments, and the Commonwealth promoting the use of solar enrgy via subsidies was that it is cheaper to do that than to build new power stations. If the taxation issues are not settled then it is likely to frighten people off making installations. In that case all of the touted benefits may well be lost.

I guess we are lucky in that there are incentives to" go green". In some parts of the world things are simply mandated and you wear the full cost. However, if governmens truly wish to see the atmosphere improve, then they had best get their strategies sorted out.

[QUOTE=artme;1145065Perhaps the Henry Review of the tax system will clear up some of these things..[/QUOTE]
What a sense of humour, a government review that will actually sort something out

Originally Posted by artme

However, if governmens truly wish to see the atmosphere improve, then they had best get their strategies sorted out.

I think the only thing that either the Ford or Holden governments in Australia is to get re elected, actually doing something is too dangerous, you may lose an opinion poll.

Originally Posted by Pusser

What a sense of humour, a government review that will actually sort something out

Originally Posted by Sebastiaan56

I think the only thing that either the Ford or Holden governments in Australia is to get re elected, actually doing something is too dangerous, you may lose an opinion poll.

Yeah, oxymorons and cynicism!! Good to see we are all still sane and healthy!