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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

Subdivision 40-G - Capital expenditure of primary producers and other landholders    View history reference

Operative provisions

SECTION 40-630  Landcare operations  

 View history reference ITAA 36

40-630(1)  

You can deduct capital expenditure you incur at a time in an income year on a *landcare operation for:


(a) land in Australia you use at the time for carrying on a *primary production business; or


(b) rural land in Australia you use at the time for carrying on a *business for a *taxable purpose from the use of that land (except a business of *mining and quarrying operations).
 View history reference

Note:

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

(a) if section 250-150 applies - you are taken not to be using the land for the purpose of carrying on a primary production business, or a business for the purpose of producing assessable income from the use of rural land (except a business of mining and quarrying operations), to the extent specified under subsection 250-150(3); or
(b) otherwise - you are taken not to be using the land for such a purpose.

40-630(1A)  

 View history reference
A *rural land irrigation water provider can deduct capital expenditure it incurs at a time in an income year on a *landcare operation for:


(a) land in Australia that other entities use at the time for carrying on *primary production businesses; or


(b) rural land in Australia that other entities use at the time for carrying on *businesses for a *taxable purpose from the use of that land (except a business of *mining and quarrying operations);
 View history reference

being entities supplied with water by the rural land irrigation water provider.

40-630(1B)  

 View history reference
A rural land irrigation water provider is:


(a) an *irrigation water provider; or


(b) an entity whose *business is primarily and principally the supply (otherwise than by using a *motor vehicle) of water to entities for use in carrying on *businesses (except businesses of *mining and quarrying operations) using rural land in Australia.
 View history reference

Exception: plant

40-630(2)  

However, you cannot deduct an amount under this Subdivision for capital expenditure on *plant, except:


(a) a fence erected for a purpose described in paragraph 40-635(1)(a) or (b); or


(b) a dam or structural improvement (except a fence) covered by paragraph (1)(c), (d), (e) or (f) of the definition of plant in section 45-40.

40-630(2A)  

 View history reference
In applying paragraph (2)(b) to capital expenditure incurred by a *rural land irrigation water provider on a dam or structural improvement, the requirement in paragraph 45-40(1)(c) that the land on which the dam or structural improvement is situated be used for agricultural or pastoral operations is to be disregarded.

Exception: deduction available under Subdivision 40-F

40-630(2B)  

 View history reference
A *rural land irrigation water provider cannot deduct an amount under this Subdivision for capital expenditure if the entity can deduct an amount for that expenditure under Subdivision 40-F.

Exception: deduction available under Subdivision 40-J

40-630(2C)  

 View history reference
You cannot deduct an amount under this Subdivision for capital expenditure if any entity can deduct an amount for that expenditure for any income year under Subdivision 40-J.

Reduction of deduction

40-630(3)  

You must reduce your deduction by a reasonable amount to reflect your use of the land in the income year after the time when you incurred the expenditure for a purpose other than the purpose of carrying on:


(a) a *primary production business; or


(b) a *business for the *purpose of producing assessable income from the use of rural land (except a business of *mining and quarrying operations).
 View history reference

40-630(4)  

 View history reference
Subsection (3) does not apply to expenditure incurred by a *rural land irrigation water provider. Instead, a rural land irrigation water provider must reduce its deduction in relation to particular land by a reasonable amount to reflect an entity's use of the land in the income year after the rural land irrigation water provider incurred the expenditure for a purpose other than a *taxable purpose.


 



This information is provided by CCH Australia Limited. View the disclaimer and notice of copyright.
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