Fund income tax return instructions 2011

Capital works

You can deduct construction costs in respect of the following capital works:

• buildings or extensions, alterations or improvements to a building
• structural improvements or extensions, alterations or improvements to structural improvements
• environmental protection earthworks.

Deductions for construction costs must be based on actual costs incurred. If it is not possible to genuinely determine the actual costs, provide an estimate by a quantity surveyor or other independent qualified person. The costs incurred by the fund for providing this estimate are deductible as a tax-related expense, not as an expense in gaining or producing assessable income.

Sections within Appendix 1: Capital works deductions

• Capital works
• Who can claim?
• Lessee of a building
• Requirement for deductibility
• No deduction until construction is complete
• Establishing the deduction base
• Construction expenditure
• Construction expenditure area
• Pool of construction expenditure
• Deductible use
• Special rules about uses
• Calculation and rate of deduction
• Capital works begun before 27 February 1992 and used as described in table 43-140 of the ITAA 1997
• Capital works begun after 26 February 1992
• Undeducted construction expenditure
• Balancing deduction on destruction