Fund income tax return instructions 2011

Construction expenditure area

The construction of the capital works must be complete before the construction expenditure area is determined. A separate construction expenditure area is created each time an entity undertakes the construction of capital works.

For construction area expenditure before 1 July 1997, the capital works must have been constructed for a specified use at the time of completion, depending on the time when the capital works started. The first specified use construction time was 22 August 1979; see table 43-90 and subsection 43-75(2) of the ITAA 1997.

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