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

Operative provisions

SECTION 40-645  Electricity and telephone lines  

 View history reference ITAA 36

40-645(1)  

You can deduct amounts for capital expenditure you incur on * connecting power to land or upgrading the connection if, when you incur the expenditure:


(a) you have an interest in the land or are a share-farmer carrying on a * business on the land; and


(b) you or another entity intends to use some or all of the electricity to be supplied as a result of the expenditure in carrying on a business on the land for a * taxable purpose at a time when you have an interest in the land or are a share-farmer carrying on a business on the land.

40-645(2)  

You can also deduct amounts for capital expenditure you incur on a telephone line on or extending to land if, when you incurred the expenditure:


(a) a * primary production business was carried on the land; and


(b) you had an interest in the land or you were a share-farmer carrying on a primary production business on the land.

40-645(3)  

The amount you can deduct is 10% of the expenditure:


(a) for the income year in which you incur it; and


(b) for each of the next 9 income years.

Note 1:

Various provisions may reduce the amount you can deduct or stop you deducting. For example, see:

· Division 26 (limiting deductions generally); and
· section 40-650 (specifying expenditure you cannot deduct under this Subdivision); and
· Division 245 (which may affect your entitlement to a deduction if your debts are forgiven).
Note 2:

If you recoup an amount of the expenditure, the amount will be included in your assessable income. See Subdivision 20-A .


 



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