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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-I - Capital expenditure that is deductible over time    View history reference

Operative provisions

SECTION 40-840  Meaning of project amount  

 View history reference [330-80; 330-370; 400-15]

40-840(1)  

An amount of * mining capital expenditure or * transport capital expenditure you incur is a project amount if:


(a) it does not form part of the * cost of a * depreciating asset you * hold or held; and


(b) you cannot deduct it under a provision of this Act outside this Subdivision; and


(c) it is directly connected with:

(i) for mining capital expenditure - carrying on the * mining and quarrying operations in relation to which the expenditure is incurred; or

(ii) for transport capital expenditure - carrying on the * business in relation to which the expenditure is incurred.
 View history reference

40-840(2)  

Another amount of capital expenditure you incur is also a project amount so far as:


(a) it does not form part of the * cost of a * depreciating asset you * hold or held; and


(b) you cannot deduct it under a provision of this Act outside this Subdivision; and


(c) it is directly connected with a project you carry on or propose to carry on for a * taxable purpose; and


(d) it is one of these:

(i) an amount paid to create or upgrade community infrastructure for a community associated with the project; or

(ii) an amount incurred for site preparation costs for depreciating assets (except, for * horticultural plants, in draining swamp or low-lying land or in clearing land); or

(iii) an amount incurred for feasibility studies for the project; or

(iv) an amount incurred for environmental assessments for the project; or

(v) an amount incurred to obtain information associated with the project; or

(vi) an amount incurred in seeking to obtain a right to * intellectual property; or

(vii) an amount incurred for ornamental trees or shrubs.
 View history reference


 



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