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INCOME TAX ASSESSMENT ACT 1997

CHAPTER 2 - LIABILITY RULES OF GENERAL APPLICATION

PART 2-10 - CAPITAL ALLOWANCES: RULES ABOUT DEDUCTIBILITY OF CAPITAL EXPENDITURE

Division 40 - Capital allowances

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History Div 40 substituted for Divs 40, 41 and 42 by No 76 of 2001.

Subdivision 40-F - Primary production depreciating assets

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History Subdiv 40-F inserted by No 76 of 2001.

Operative provisions

SECTION 40-515  Water facilities and horticultural plants

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40-515(1)

You can deduct an amount equal to the decline in value for an income year (as worked out under this Subdivision) of a ^*depreciating asset that is one of these:

(a) a ^*water facility;

(b) a *horticultural plant.

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(c) (Repealed by No 129 of 2004)

Note 1: Sections 40-540 and 40-545 show you how to work out the decline. Note 2: Generally, only one taxpayer can deduct amounts for a depreciating asset. However, if you and another taxpayer jointly hold the asset, each of you deduct amounts for it: see section 40-35.

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History S 40-515(1) amended by No 129 of 2004.

Conditions

40-515(2)

However, the applicable condition in section 40-525 must be satisfied for the ^*depreciating asset.

Limit on deduction

40-515(3)

You cannot deduct more in total than the amount of capital expenditure incurred on the ^*depreciating asset.

Reduction of deduction: water facilities

40-515(4)

You must reduce your deduction for a ^*water facility for an income year by the part of the facility's decline in value that is attributable to the period (if any) in the income year when it was:

(a) not wholly used in carrying on a ^*primary production business on land in Australia; or

(b) not wholly used for a ^*taxable purpose.

40-515(5)

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Paragraph (4)(a) does not apply to a ^*water facility if the expenditure incurred on the construction, manufacture, installation or acquisition of the water facility was incurred by an ^*irrigation water provider.

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History S 40-515(5) inserted by No 23 of 2005.

Meaning of irrigation water provider

40-515(6)

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An irrigation water provider is an entity whose ^*business is primarily and principally the supply (otherwise than by using a ^*motor vehicle) of water to entities for use in ^*primary production businesses on land in Australia.

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History S 40-515(6) inserted by No 23 of 2005. S 40-515 inserted by No 76 of 2001.