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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 43 - Deductions for capital works  

Subdivision 43-F - Calculation of deduction  

SECTION 43-205  Explanatory material  

 [No equivalent]

Capital works begun before 27 February 1992

The calculation for these works is based on * your construction expenditure and the applicable rate of deduction. There can be only one rate of deduction that applies to * your area. However, reductions of deductions may apply.

You must reduce your deduction for any period in the income year that you did not own * your area and use it in the way described in Table 43-140 (Current year use). Because there are 2 use tests in Table 43-140 for * hotel buildings and * apartment buildings (a general income producing test and a more specific hotel and short-term traveller accommodation use test), there are 2 reduction steps.

The first step reduces your deduction if part of * your area was not used as a * hotel building or * apartment building. The second step reduces the deduction to the extent that your area is used only partly for the * purpose of producing assessable income. This occurs, for example, if you * derive both assessable and exempt income, or if part of your area is not used to produce assessable income for all or part of the period it was used as a hotel building or apartment building.

Capital works begun after 26 February 1992

The calculation for these works is based on a portion of * your construction expenditure and the applicable rate of deduction. There can be 2 rates of deduction for your area depending on the way you use it.

If 2 rates apply, there will be a separate calculation for the part of * your area used in the way described in Table 43-140 and for the part of * your area used in the way described in Table 43-145 (Use in the 4% manner). A gross deduction and subsequent reduction is calculated for each.

The reduction is the same as the second reduction for capital works begun before 27 February 1992.

 



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