Calculate the amount worked out using the formula:
| ||Your CE × Days used × Applicable rate|
your CE is *your construction expenditure.
days used is the number of days in the income year that you owned or were the lessee of *your area and used it in the way that applies to the capital works under Table 43-140 (Current year use).
applicable rate is:
- (a) 0.04 if the capital works began after 21 August 1984 and before 16 September 1987; or
- (b) 0.025 in any other case.
For the purpose of working out the applicable rate, capital works begun after 15 September 1987 are taken to have begun before 16 September 1987 in certain circumstances. See section 43-220.
This step applies only to *hotel buildings and *apartment buildings. Reduce the Step 1 amount by the extent to which:
- (a) for a hotel building - any part of *your area was not used wholly or mainly to operate a hotel, motel or guest house; or
- (b) for an apartment building - any part of *your area was not used wholly for or in association with providing short-term accommodation for travellers.
Reduce the Step 1 or 2 amount by the extent to which:
- (a) for a *hotel building or *apartment building - *your area was used only partly for the *purpose of producing assessable income; or
- (b) for any other capital works - *your area was used only partly for the *purpose of producing assessable income or conducting *R&D activities.
This Step applies if:
- · part of your income from the capital works is exempt income; or
- · part of the capital works were not used for the purpose of producing assessable income or were not available for that use; or
- · the capital works were not used for such a purpose during a part of the days used period.
The amount of your deduction is the lesser of your Step 3 amount or the *undeducted construction expenditure for *your area.
S 43-215 amended by No 93 of 2011, s 3 and Sch 3 item 41, by substituting "conducting *R&D activities" for "carrying on *research and development activities" in step 3, effective 8 September 2011. For application, savings and transitional provisions see note under Div 355 heading.
S 43-215 amended by No 14 of 2009, s 3 and Sch 4 item 23, by substituting "deduction" for "allowable deduction" in step 4, effective 26 March 2009.