Blackhole expenditure: business related expenses

Overview of changes

Changes have been made to the law to provide a systematic treatment for various capital expenses which were not previously recognised for income tax purposes. Such expenses are commonly known as 'blackhole expenditure'. The changes are effective for expenditure incurred from 1 July 2005 or capital gains tax (CGT) events happening on or after that date. They comprise:

Change 1:	Expanding the cost base and reduced cost base elements for CGT assets.
Change 2:	Expanding the elements of cost for depreciating assets.
Change 3:	A five-year write-off for certain lease and licence termination payments.
Change 4:	A five-year write-off for a greater range of business related costs not recognised elsewhere in the tax law.