Fund income tax return instructions 2011

No deduction until construction is complete

A fund cannot claim a deduction for any period before the construction of the capital works is complete even though it used them, or part of them, before completion. Additionally, the deduction cannot exceed the undeducted construction expenditure for your area.

Capital works are taken to have started when the first step in the construction phase starts, for example, the pouring of foundations or sinking of pylons for a building.

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