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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  

Operative provisions

SECTION 43-210  Deduction for capital works begun after 26 February 1992  

 View history reference ITAA 36


Step 1 

Calculate the amount worked out using the formula:


Portion of your CE × Days used × 0.04
365

where:

portion of your CE is the portion of *your construction expenditure that is attributable to the part of *your area that you used in the *4% manner.

days used is the number of days in the income year that:

(a) you owned or were the lessee of that part of *your area and used it in the *4% manner; or
(b) you were the holder of that part of *your area under a *quasi-ownership right over land granted by an *exempt Australian government agency or an *exempt foreign government agency, and used that part of your area in the 4% manner.

Step 2 

Reduce the Step 1 amount by the extent to which the part referred to in Step 1 was used only partly for the *purpose of producing assessable income.

Note:

This Step applies if:

· part of your income from the part referred to in Step 1 is exempt income; or
· part of the part referred to in Step 1 was not used for the purpose of producing assessable income or was not available for that use; or
· the part of the part referred to in Step 1 was not used for such a purpose during a part of the days used period.

Step 3 

Calculate the amount worked out using the formula:


 Portion of your CE × Days used × 0.025
365
 

where:

portion of your CE is the portion of *your construction expenditure that is attributable to the part of *your area that you did not use in the *4% manner but was used as described in Table 43-140 (Current year use).

days used is the number of days in the income year that:

(a) you owned or were the lessee of that part of *your area and used it in that manner; or
(b) you were the holder of that part of *your area under a *quasi-ownership right over land granted by an *exempt Australian government agency or an *exempt foreign government agency, and used that part of your area in that manner.

Step 4 

Reduce the Step 3 amount by the extent to which the part referred to in Step 3:

(a) for a *hotel building or *apartment building - was used only partly for the *purpose of producing assessable income; or
(b) for any other capital works - was used only partly for the purpose of *producing assessable income or conducting *R&D activities.

Note:

This Step applies if:

· part of your income from the part referred to in Step 3 is exempt income; or
· part of the part referred to in Step 3 was not used for the purpose of producing assessable income (or R&D activities) or was not available for that use; or
· the part of the part referred to in Step 3 was not used for such a purpose during a part of the days used period.

Step 5 

Add the Step 2 and Step 4 amounts.


Step 6 

The amount of your deduction is the lesser of your Step 5 amount or the *undeducted construction expenditure for *your area.


 



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