Substantiation

Keeping Records - Group Certificates (PAYG Payment Summaries)

You are required to retain your copy of group certificates (PAYG payment summaries) for at least five years from the date you lodge your tax return or October 31st of the year your return is due, whichever is sooner.

Receipts for Tax Deductions

To satisfy substantiation requirements, you must retain evidence of tax deductions for at least 5 years. The evidence must consist of a receipt or diary entry showing the date of purchase, the suppliers name, the original cost of the item, and a description of the item.

Shares, Options etc (Trading Transactions)

For capital gains tax purposes, it is ideal to maintain a share register. Often shares in the same company are purchased at different intervals and therefore, separate records must be maintained in order to correctly calculate capital gains tax when the shares are eventually sold.

Sufficient records for tax purposes would include:

• ◊ Type of transaction (Buy or Sell)
• ◊ Date of transaction
• ◊ Company name
• ◊ Number of units bought or sold
• ◊ Price per unit on buy or sell transaction
• ◊ Brokerage / stamp duty charged on buy / sell transaction
• ◊ Other expenses incurred

Depreciation Items

Items of equipment that are used for employment or business purposes are deductible over a period of time. Each year a proportion of the original cost of the item may be claimed as a tax deduction.

It is important to keep accurate records of all items of equipment purchased or sold for income tax purposes. Appropriate records for income tax purposes would include:

• ◊ Date of purchase
• ◊ Purchase price
• ◊ Description of the item
• ◊ Approximate business use or work use percentage

Records must be kept for the entire life of the item, and for a further five years from your last claim for a depreciation tax deduction. If you maintain a depreciation schedule, additional information may be kept - such as the depreciation method (prime cost or diminishing value), the useful life of the asset or the rate of depreciation.