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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    View history reference

Commissioner ' s Remedial Power

Note: A Commissioner ' s Remedial Power (CRP 2017/2) is relevant to this part of the tax law. Taxation Administration (Remedial Power - Small Business Restructure Roll-over) Determination 2017 (F2017L01687) modifies the operation of s 40-340 of the Income Tax Assessment Act 1997 and any other provisions of a taxation law whose operation is affected by the modified operation of s 40-340 in relation to an asset transferred under a small business restructure roll-over (item 8 of the table in s 40-340(1) ).

The operation of the relevant provisions is modified as follows:

If s 40-340 of ITAA 1997 provides for rollover relief in relation to a disposal of a depreciating asset because the condition in item 8 of the table in s 40-340(1) of ITAA 1997 is satisfied in relation to the asset, that section has effect as if it also provided that the disposal of the asset has no direct consequences under the income tax law (other than Div 40 of ITAA 1997).

The modification applies in respect of transfers on or after 8 May 2018.

An entity must treat a modification as not applying to it or any other entity if the modification would produce a less favourable result for it. The Commissioner is empowered by s 370-5 of Sch 1 to the Taxation Administration Act 1953 to make modifications, by legislative instrument, to ensure the law is administered to achieve its intended purpose or object.

Subdivision 40-F - Primary production depreciating assets    View history reference

Operative provisions

SECTION 40-525  Conditions  

 View history reference ITAA 36

Water facilities

40-525(1)  

 View history reference
The capital expenditure you incurred on the construction, manufacture, installation or acquisition of the * water facility must have been incurred:


(a) primarily and principally for the purpose of conserving or conveying water for use in a * primary production business that you conduct on land in Australia; or


(b) for expenditure incurred by an * irrigation water provider - primarily and principally for the purpose of conserving or conveying water for use in primary production businesses conducted by other entities on land in Australia, being entities supplied with water by the irrigation water provider.

Note:

If Division 250 applies to you and an asset that is a water facility:

(a) if section 250-150 applies - the condition in this subsection is taken not to be satisfied for the facility to the extent specified under subsection 250-150(3) ; or
(b) otherwise - the condition in this subsection is taken not to be satisfied for the facility.

Horticultural plants

40-525(2)  

One of the conditions in this table must be satisfied:
Conditions relating to horticultural plants
ItemCondition
1You own the *horticultural plant and any holder of a lease, lesser interest or licence relating to the land does not carry on a *business of *horticulture on the land
.......... .
2The *horticultural plant is attached to land you hold under a lease, or a *quasi-ownership right granted by an *exempt Australian government agency or an *exempt foreign government agency, and:
 (a)the lease or quasi-ownership right enables you to carry on a *business of *horticulture on the land; and
 (b)any holder of a lesser interest or licence relating to the land does not carry on a *business of *horticulture on the land.
.......... .
3You:
 (a)hold a licence relating to the land to which the *horticultural plant is attached; and
 (b)carry on a *business of *horticulture on the land as a result of holding the licence.

Note:

If Division 250 applies to you and an asset that is a horticultural plant:

(a) if section 250-150 applies - a condition in this subsection is taken not to be satisfied for the plant to the extent specified under subsection 250-150(3) ; or
(b) otherwise - the conditions in this subsection are taken not to be satisfied for the horticultural plant.

Fodder storage assets

40-525(3)  

 View history reference
The capital expenditure you incurred on the construction, manufacture, installation or acquisition of the *fodder storage asset must have been incurred primarily and principally for use in a *primary production business that you conduct on land in Australia.

Note:

If Division 250 applies to you and an asset that is a fodder storage asset:

(a) if section 250-150 applies - the condition in this subsection is taken not to be satisfied for the asset to the extent specified under subsection 250-150(3) ; or
(b) otherwise - the condition in this subsection is taken not to be satisfied for the asset.

Fencing assets

40-525(4)  

 View history reference
The capital expenditure you incurred on the construction, manufacture, installation or acquisition of the *fencing asset must have been incurred primarily and principally for use in a *primary production business that you conduct on land in Australia.

Note:

If Division 250 applies to you and an asset that is a fencing asset:

(a) if section 250-150 applies - the condition in this subsection is taken not to be satisfied for the asset to the extent specified under subsection 250-150(3) ; or
(b) otherwise - the condition in this subsection is taken not to be satisfied for the asset.


 



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