• P8 Business income and expenses

    Attention

    Warning:

    This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

    End of attention

    This item has three sections:

    The amounts to be included in the Income and Expenses sections of item P8 are amounts derived from your accounting system or financial statements, except for:

    • the values of opening and closing stock, which are to be shown at tax values, and
    • depreciation expenses for small business entities choosing to use the simplified depreciation rules, which are to be shown at tax values.

    The income and expense amounts to be included at item P8 should form part of your profit and loss statement and are the basis for calculating your net profit or loss. You should deal with any adjustments to these amounts for tax purposes in the Reconciliation items section of item P8.

    Former STS taxpayers

    If you are eligible and are continuing to use the STS accounting method, you must complete the income and expenses sections using the STS accounting method - see Former simplified tax system (STS) taxpayers.

    Stop

    You show personal services income and related expenses at item P1, with the exception of personal services income subject to foreign resident withholding, which you show at this item.

    Income

    The business income to be shown at item P8 is divided into:

    Stop

    Do not show the following types of income at item P8:

    • gross interest - show the amount of income at item 10 on your tax return
    • dividends and franking credits - show the amounts at item 11 on your tax return
    • distributions from partnerships and trusts - show these at item 13 on your tax return (supplementary section)
    • gross rental or similar income that is not derived from carrying on a business of renting property, such as agistment or hire fees - show the amount at item 21 on your tax return (supplementary section)
    • net capital gains - show at item 18 on your tax return (supplementary section)

    PSI shown at item P1

    • farm management withdrawals - show at item 17 on your tax return (supplementary section)
    • attributed foreign income - show at item 19 on your tax return (supplementary section)
    • foreign source income - show at item 20 on your tax return (supplementary section).

    Goods and services tax (GST)

    If you are registered or required to be registered for GST, the following apply:

    • For income tax purposes, you should exclude GST from assessable income, exempt income and amounts received or receivable that you take into account in calculating income and deductions.
    • You should reduce deductible losses and outgoings by the amount of input tax credit entitlement.
    • In certain circumstances - for example, a change in how much you used an asset for business purposes - an adjustment for GST purposes results in an amount being included in assessable income (if the adjustment is a
      GST-decreasing adjustment) or being deductible (if the adjustment is a
      GST-increasing adjustment).
    • You should also exclude GST components under other specific rules including capital gains tax (cost base, reduced cost base, capital proceeds) and termination values.

    If you are not registered or required to be registered for GST, you do not need to adjust your income and deductions for GST. You can claim the GST-inclusive amount incurred on deductible outgoings.

    Former STS taxpayers

    If you are eligible and are continuing to use the STS accounting method, you must complete the income and expenses sections using the STS accounting method - see Former simplified tax system (STS) taxpayers.

    What you may need

    • Primary production worksheet: If you are a primary producer, you will need this worksheet to help you determine some of the amounts in this section. The worksheet is included in Information for primary producers 2012 (NAT 1712). Complete the worksheet before proceeding.
    • Individual PAYG payment summary schedule 2012 (NAT 3647).

    Did you have amounts withheld from your business income - other than PSI included at item P1?

    No

    Go to Assessable government industry payments.

    Yes

    Read on.

    If tax has been withheld from business income, you should have received a payment summary.

    You will need to complete the Individual PAYG payment summary schedule 2012 before completing item P8 if you received any of the following payment summaries:

    • PAYG payment summary - business and personal services income (NAT 72545)
    • PAYG payment summary - withholding where ABN not quoted
    • PAYG payment summary - foreign resident withholding.

    The PAYG payment summary - business and personal services income allows reporting of different payment types (including voluntary agreement, labour hire or other specified payments). When completing the individual payment summary schedule, you must specify the nature of the income and the payment type made to you.

    For further information, see the next section How to complete the Individual PAYG payment summary schedule 2012.

    A payer may issue a receipt, remittance or similar document in place of the PAYG payment summary - withholding where ABN not quoted.

    If you received income from which tax was withheld and you did not receive or have lost your payment summary, contact your payer and ask for a copy.

    How to complete the Individual PAYG payment summary schedule 2012

    Remember: If you have both business income (item P8) and personal services income (item P1), you will need to complete an Individual PAYG payment summary schedule 2012 for each type of income.

    Step 1  Write your TFN and name in the appropriate boxes at the top of the schedule.

    Step 2  Nature of income, print X in the Business income box.

    Step 3  For each payment summary, transfer the following information to the schedule:

    • the type of withholding - look at your payment summary carefully to determine its type and complete the Type box, using the following key

    V  voluntary agreement
    S  labour hire or other specified payments
    N  withholding where ABN not quoted
    F  foreign resident withholding

    • the payer's ABN or withholding payer number (WPN) and the payer's name in the appropriate boxes
    • the total tax withheld in the Tax withheld box
    • the gross payment in the Gross payment box.

    Step 4  Check that you have recorded details from all relevant payment summaries on your payment summary schedule, then attach the schedule to page 3 of your tax return.

    Do not attach the payment summaries to your tax return - you must keep them for a period of five years.

    Payers must report to us details of payments where amounts of tax have been withheld. This information will be cross-checked with that on your tax return to make sure that you have declared the correct amount of income and the correct amount of tax withheld.

    Gross payments where Australian business number (ABN) not quoted

    Did you have amounts of tax withheld for failure to quote an ABN?

    No

    Go to Gross payments subject to foreign resident withholding.

    Yes

    Read on.

    You need to know

    The amounts you show at C and D are the total income you received from which your payers have withheld an amount because you did not quote your ABN. You will be able to calculate these amounts from your completed Individual PAYG payment summary schedule 2012.

    Completing this item

    Step 1  Add up all the Gross payment amounts on your completed payment summary schedule, derived from primary production activities that have an N in the Type box. Write the total at C item P8 on page 2 of your schedule. Do not show cents.

    Step 2  Add up all the Gross payment amounts on your completed payment summary schedule, derived from non-primary production activities that have an N in the Type box. Write the total at D. Do not show cents.

    Step 3  Add up the amounts you have written at C and D and write the total in the adjacent Totals box.

    If you complete C or D item P8 you must complete W item 15 on page 14 of your tax return (supplementary section).

    Gross payments subject to foreign resident withholding

    Did you receive any payments that were subject to foreign resident withholding?

    No

    Go to Gross payments - voluntary agreement.

    Yes

    Read on.

    You need to know

    The amount you show at B is the total income you received from your payers which is subject to foreign resident withholding. It includes any amounts of tax withheld. You will be able to calculate this amount from your completed Individual PAYG payment summary schedule 2012.

    Completing this item

    Step 1  Add up all the Gross payment amounts on your completed payment summary schedule, derived from non-primary production activities that have an F in the Type box. Write the total at B item P8 on page 2 of your schedule. Do not show cents.

    Step 2  Transfer the amount at B to the adjacent Totals box.

    If you complete B item P8, you must complete E item 15 on page 14 of your tax return (supplementary section).

    You will not have any primary production amounts at this item. Leave A blank.

    Gross payments - voluntary agreement

    Did you receive any income that was subject to a PAYG voluntary agreement?

    No

    Go to Gross payments - labour hire or other specified payments.

    Yes

    Read on.

    You need to know

    The amounts you show at E and F are the total income you received that was subject to a voluntary agreement to withhold tax and include the tax withheld. You will be able to calculate this amount from your completed Individual PAYG payment summary schedule 2012.

    Completing this item

    Step 1  Add up all the Gross payment amounts on your completed payment summary schedule, derived from primary production activities that have a V in the Type box. Write the total at E item P8 on page 2 of your schedule. Do not show cents.

    Step 2   Add up all the Gross payment amounts on your completed payment summary schedule, derived from non-primary production activities that have a V in the Type box. Write the total at F. Do not show cents.

    Step 3   Add up the amounts you have written at E and F, and write the total in the adjacent Totals box.

    If you complete E or F item P8, you must complete D item 15 on page 14 of your tax return (supplementary section).

    Gross payments - labour hire or other specified payments

    Did you receive:

    • income under a labour-hire arrangement, or
    • a specified payment, including  
      • income from tutorial services provided for the Indigenous Tutorial Assistance Scheme of the Department of Education, Employment and Workplace Relations
      • income from translation and interpretation services for the Translating and Interpreting Service National of the Department of Immigration and Citizenship, or
      • income as a performing artist in a promotional activity?
       

    No

    Go to Assessable government industry payments.

    Yes

    Read on.

    You need to know

    The amount you show at O is the total income you received from labour hire or specified payments and includes the tax withheld. You will be able to calculate this amount from your completed Individual PAYG payment summary schedule 2012.

    Stop

    Do not include income received as an employee of a labour-hire business. These amounts will appear on your PAYG payment summary - individual non-business, and should be shown at item 1 on your tax return.

    Completing this item

    Step 1   Add up all the Gross payment amounts on your completed payment summary schedule that have an S in the Type box. These amounts are non-primary production income. Write the total at O item P8 on page 2 of your schedule. Do not show cents.

    Step 2   Transfer the amount at O to the adjacent Totals box.

    If you complete O item P8, you must complete F item 15 on page 14 of your tax return (supplementary section).

    You will not have any primary production amounts at this item. Leave N blank.

    Assessable government industry payments

    Did you receive assessable government industry assistance?

    No

    Go to Other business income.

    Yes

    Read on.

    You need to know

    Generally, government credits, grants, rebates, bounties and subsidies are assessable income in the hands of the recipient if they are received in, or in relation to, the carrying on of a business. This generally includes amounts of a capital nature. However, amounts relating to the commencement or cessation of a business may not be assessable income, but may give rise to a capital gain.

    Examples of assessable government industry assistance are:

    • bounties
    • cleaner fuels grant
    • drought relief
    • employee subsidies
    • export incentive grants
    • fuel grant under the energy grants credits scheme
    • fuel tax credits
    • industry restructuring and adjustment payments
    • producer rebate (wine equalisation tax)
    • product stewardship (oil) benefit.

    For more information, see Taxation Ruling TR 2006/3: Income tax: government payments to industry to assist entities (including individuals) to continue, commence or cease business.

    Stop

    Do not show 'Medicare payments received by medical practices' at this item. Show them at Other business income.

    Completing this item

    Step 1 Write your total primary production government industry payments received by each business at G item P8 on page 2 of your schedule. Do not show cents.

    If you have completed the Gross income from primary production worksheet in Information for primary producers 2012, include at G the amount at PP11 on the worksheet.

    Step 2   If your assessable primary production government industry payments include a fuel grant under the energy grants credits scheme or fuel tax credits, print D in the Type box at the right of the amount at G.

    Step 3   Write your total non-primary production government industry payments received by each business at H. Do not show cents.

    Step 4   If your assessable non-primary production government industry payments include a fuel grant under the energy grants credits scheme or fuel tax credits, print D in the Type box at the right of the amount at H.

    Step 5  Add up the amounts you have written at G and H, and write the total in the adjacent Totals box.

    Other business income

    Did you receive any other business income?

    No

    Go to Total business income.

    Yes

    Read on.

    You need to know

    Other business income includes:

    • gross sales of trading stock
    • gross sales from produce
    • goods taken from stock for your own use
    • value of livestock killed for rations
    • value of livestock exchanged for other goods or services
    • gross earnings from services
    • rent derived from carrying on a business of renting property
    • taxi driver earnings (income you earned as a non-employee taxi driver if it is not shown at item P1)
    • amounts received as recoupment of expenses
    • bad debts recovered
    • profit on sale of depreciating assets
    • royalties
    • insurance recoveries
    • subsidies
    • employee contributions for fringe benefits
    • assessable non-government assistance from all sources
    • foreign exchange (forex) gains - for more information about forex gains, search this website or see question 24 in Individual tax return instructions supplement 2012.

    Your 'other business income' excludes amounts shown at C, D, A, B, E, F, N, O, G and H on your schedule.

    If you are a primary producer, you must add the amounts shown at PP1, PP2, PP6, PP7 and PP10 on your Gross income from primary production worksheet. This worksheet is included in the publication Information for primary producers 2012. You must add the total to any other income from a business of primary production referred to above. You show the total of all other income from the business of primary production at I item P8 on page 2 of your schedule.

    Completing this item

    Step 1  Write your total amount of 'other' primary production business income or loss at I item P8 on page 2 of your schedule. Do not show cents.

    Step 2   If you made a loss, print L in the box at the right of the amount at I.

    Step 3  Write your total amount of 'other' non-primary production business income or loss at J. Do not show cents.

    Step 4   If you made a loss, print L in the box at the right of the amount at J.

    Step 5  Add up your 'other' primary production and non-primary production business income or loss and write the total in the adjacent Totals box.

    Step 6   If you made a loss, print L in the box at the right of the Totals box.

    Total business income

    Completing this item

    Step 1  Add up the primary production amounts shown at C, A, E, N, G and I item P8 on your schedule. Write the total at TOTAL BUSINESS INCOME in the Primary production column. Remember that A and N will be blank.

    Step 2   If you made a loss, print L in the box at the right of the amount at TOTAL BUSINESS INCOME in the Primary production column.

    Step 3  Add up the non-primary production amounts shown at D, B, F, O, H and J item P8 . Write the total at TOTAL BUSINESS INCOME in the Non-primary production column.

    Step 4   If you made a loss, print L in the box at the right of the amount at TOTAL BUSINESS INCOME in the Non-primary production column.

    Step 5   Add up the amounts at TOTAL BUSINESS INCOME in the Primary production and Non-primary production columns and write the total in the adjacent Totals box. If you made a loss, print L in the box at the right of this amount.

    Expenses

    Stop

    Do not include the following expense items on your schedule:

    • non-business interest and dividend income expenses - claim deductible expenses at items D7 and D8 on your tax return
    • farm management deposits - take them into account as required at item 17 on your tax return (supplementary section)
    • non-business rental expenses - claim deductible expenses at item 21 on your tax return (supplementary section)
    • expenses and losses relating to foreign source income - take them into account as required at item 20 or, in the case of certain debt deductions, claim them at item D15 on your tax return (supplementary section)
    • expenses relating to your personal services income shown at item P1 on your schedule
    • low-value pool deduction, where the pool contains assets used for work-related, self-education or non-business rental purposes - see question D6 in Individual tax return instructions 2012.

    You need to complete all items that relate to your business or businesses. You can deduct business expenses if the expenses were necessary to carry on your business for the purpose of earning assessable income.

    If you are a primary producer, you will need a primary production worksheet to help you work out some of the amounts in this section - this worksheet is included in the publication Information for primary producers 2012. Complete the worksheet before proceeding.

    Goods and services tax

    If you are registered or required to be registered for GST, exclude from the deductions any input tax credit entitlements that arise in relation to outgoings. If you pay GST by instalments, and incurred a penalty for underestimating a varied GST instalment, you can claim a deduction for the penalty at item D10 on your tax return. Do not show the penalty on your Business and professional items schedule for individuals 2012. For more information, see Individual tax return instructions 2012.

    Records you need to keep

    You must keep your business expenses records for five years after you prepared or obtained them, or five years after you completed the transactions or acts to which they relate.

    Prepayments of $1,000 or more

    If you made a prepayment of $1,000 or more for something to be done (in whole or in part) in a future income year, the timing of your deduction may be affected by the rules relating to prepayments. Generally, you will need to apportion your deduction for prepaid business expenditure over the service period, or 10 years, whichever is less. There is an exception for small business entities if the 12-month rule applies.

    For more information, see the publication Deductions for prepaid expenses 2012 (NAT 4170).

    Where expenses shown at item P8 include prepaid expenses that differ from the amounts allowable as deductions in 2011-12, then make an expense reconciliation adjustment at H in the Reconciliation items section of item P8.

    Thin capitalisation

    The thin capitalisation provisions apply to entities (including individuals) to reduce certain deductions (called 'debt deductions') for costs incurred in obtaining and servicing debt finance, where the debt applicable to Australian operations exceeds the limits set out in Division 820 of the ITAA 1997.

    Do the thin capitalisation provisions apply to you?

    The thin capitalisation rules may apply to you if:

    • you are an Australian resident and you, or any of your associate entities, are an Australian controller of a foreign entity or carry on business overseas at or through a permanent establishment, or
    • you are a foreign resident and you carry on business in Australia at or through a permanent establishment or otherwise have Australian income-producing assets.

    The thin capitalisation rules will not apply to you if:

    • your debt deductions (combined with the debt deductions of your associate entities) do not exceed $250,000 in the income year, or
    • you are an Australian resident and the combined value of your associates' and your Australian assets is not less than 90% of the value of your associates' and your total assets.

    If the thin capitalisation rules apply to you, the amount of any debt deductions you can claim may be reduced by these rules. For more information, see the Guide to thin capitalisation.

    Opening stock

    Did you have trading stock on hand at the start of the year?

    No

    Go to Purchases and other costs.

    Yes

    Read on.

    You need to know

    The opening value of an item of stock must equal its closing value in the previous year. The total value of all stock on hand at the start of the year is equal to the amount shown as closing stock on your 2011 schedule.

    If you are a primary producer, you must add the value of your opening stock from your livestock account at PP4 on your primary production worksheet to the value of your opening stock from your produce account at PP9 on your primary production worksheet. The total of these amounts is the total value of your primary production opening stock.

    Do not include any amounts representing opening stock of a business which commenced operations during the year - include the purchase costs of these items in the relevant Purchases and other costs box.

    Completing this item

    Step 1  Write the total value of your primary production opening stock at Opening stock in the Primary production column, item P8 on page 3 of your schedule. Do not show cents.

    Step 2   Write the total value of your non-primary production opening stock at Opening stock in the Non-primary production column. Do not show cents.

    Step 3   Add up your primary production and non-primary production opening stock values and write the total at K.

    Purchases and other costs

    Did you have purchases and other costs?

    No

    Go to Closing stock.

    Yes

    Read on.

    You need to know

    This represents the direct cost of materials used for manufacture, sale or exchange in deriving the gross proceeds or earnings of the business. It includes inwards freight; and also the cost of stock acquired when starting or acquiring a business during the year. It may also include some costs for labour and services provided under contract, if these are recorded in the cost of sales account in your business books of account. If so, do not also include this amount as Contractor, sub-contractor and commission expenses.

    If you are a primary producer, you must include the value of your purchases from your livestock account at PP5 on your primary production worksheet.

    Completing this item

    Step 1   Work out the value of your primary production purchases and other costs directly related to trading stock. If you have more than one business, add up all your primary production purchases and costs.

    Step 2  Write the total value of your primary production purchases and other costs directly related to trading stock at Purchases and other costs in the Primary production column, item P8 on page 2 of your schedule. Do not show cents.

    Step 3  Work out the value of your non-primary production purchases and other costs directly related to trading stock. If you have more than one business, add up all your non-primary production purchases and other costs.

    Step 4   Write the total value of your non-primary production purchases and other costs directly related to trading stock at Purchases and other costs in the Non-primary production column. Do not show cents.

    Step 5  Add up your primary production and non-primary production purchases and other costs directly related to trading stock, and write the total at L.

    Former STS taxpayers

    If you are eligible and are continuing to use the STS accounting method, show at L only purchases and other costs that you have paid - see Former simplified tax system (STS) taxpayers.

    Closing stock

    Did you have trading stock on hand at the end of the year?

    No

    Go to Cost of sales.

    Yes

    Read on.

    If you are a small business entity and are choosing to use the simplified trading stock rules, read on. Otherwise, go to Other businesses.

    Small business entities

    You need to know

    You need to account for changes in the value of your trading stock only if there is a difference of more than $5,000 between the value of all your stock on hand at the start of the income year and a reasonable estimate of the value of all your stock on hand at the end of the income year.

    The value of your stock on hand at the start of the income year is the same value as the closing value shown on your schedule in the previous year. This may not necessarily reflect the actual value of your stock if you did not account for the change in value of your stock in the previous year. For more information on a reasonable estimate of the value of stock, visit our website or phone 13 28 66.

    You can still choose to conduct a stocktake and account for changes in the value of trading stock, if you wish.

    Is the difference between the value of your opening stock and a reasonable estimate of your closing stock more than $5,000?

    Yes

    You must account for changes in the value of your trading stock. Go to step 2.

    No

    If you choose not to account for changes in the value of your trading stock, go to step 1. Otherwise, go to step 2.

    Completing this item

    Step 1   If the difference referred to above is $5,000 or less and you choose not to account for this difference, the closing stock values you put in both the Primary production and Non-primary production columns at item P8 on page 3 of your schedule must be the same as the values you put at Opening stock. Do not put your reasonable estimate.

    Add up your primary production and non-primary production closing stock values, and write the total at M.

    Write in the TYPE box at the right of M the code letter you used last year to value closing stock:

    C cost
    M market selling value
    R replacement value.

    If this is your first year in business, the value of your closing stock will be zero. Print C in the TYPE box.

    Go to Cost of sales.

    Step 2   If the difference referred to above is more than $5,000 or you choose to account for the difference in trading stock, the closing stock values must be brought to account under section 70-35 of the ITAA 1997 - see Other businesses for how to complete this item.

    You must include in your closing stock value at M item P8 the value of all stock on hand, regardless of whether you have paid for the stock.

    Other businesses

    You need to know

    The amount that is shown at Closing stock is the total of the value of all items of trading stock, with the value of each item calculated for tax purposes in accordance with section 70-45 of the ITAA 1997.

    Trading stock is anything you have on hand which you produced, manufactured, acquired or purchased for the purpose of sale, manufacture or exchange - for example, trading stock includes livestock but not working animals (except those used by a primary producer), crops and timber when harvested, and wool after it is removed from the sheep.

    Manufacturers must include as trading stock partly manufactured goods and materials on hand. However, closing stock excludes any amount that represented closing stock of a business that ceased operations during the year. This amount is included in Other business income at I or J in the Income section of item P8. For more details about what constitutes trading stock, read Simplified trading stock rules or phone 13 28 66.

    You can choose one of the following three methods to value your trading stock:

    • cost
    • market selling value
    • replacement value.

    You may elect to value an item of trading stock below the lowest value calculated by any of these methods because of obsolescence or other special circumstances. The value you elect must be reasonable. Where you elect to value an item of trading stock below cost, market selling value and replacement value, you must complete item P19 on your schedule.

    You may use different methods to calculate each item of trading stock in different years or for different items in the same year. However, the opening value of each item in a particular year must be the same as the closing value for that item in the previous year.

    If you are registered for GST, the value of closing stock should not include an amount equal to the input tax credit that would arise if you had acquired the item solely for business purposes at the end of the income year. Input tax credits do not arise for some items of trading stock, such as shares.

    If you are a primary producer, you must add the value of your closing stock from your livestock account at PP3 on your primary production worksheet to the value of your closing stock from your produce account at PP8 on your primary production worksheet.

    The total of these amounts is the total value of your primary production closing stock.

    As the tax values of closing stock on hand are shown at PP3 and at PP8 on your primary production worksheet, you cannot reduce these values by accounting entries. Keep records showing how each item was valued.

    Completing this item

    Step 1  Work out the value of your primary production closing stock. If you have more than one business, add up all your primary production closing stock values.

    Step 2   Write the total value of your primary production closing stock at Closing stock in the Primary production column, item P8 on page 3 of your schedule. Do not show cents.

    Step 3  Work out the value of your non-primary production closing stock. If you have more than one business, add up all your non-primary production closing stock values.

    Step 4  Write the total value of your non-primary production closing stock at Closing stock in the Non-primary production column. Do not show cents.

    Step 5   Add up your primary production and non-primary production closing stock values and write the total at M.

    Step 6  From the list below, choose the letter that matches the method you used to value closing stock. If more than one method was used, select the letter that applies to the largest value:

    C  cost
    M  market selling value
    R  replacement value.

    Step 7  Print the letter in the TYPE box at the right of the amount at M.

    Cost of sales

    Did you have any cost of sales?

    No

    Go to Foreign resident withholding expenses.

    Yes

    Read on.

    You need to know

    Goods taken for your own use should not be accounted for as stock on hand at 30 June 2012. Include at I and J Other business income in the Income section of item P8 on your schedule the value of:

    • livestock killed for rations
    • livestock exchanged for other goods or services
    • goods taken for your own use.

    Use worksheet 1 to work out your cost of sales.

    Worksheet 1: Cost of sales

     

    Primary production

    Non-primary production

     

    Stock at 1 July 2011

    $

    $

    (a)

    Purchases at cost

    $

    $

    (b)

    Freight inwards

    $

    $

    (c)

    Other - for example, labour and services

    $

    $

    (d)

    Add (a), (b), (c) and (d).

    $

    $

    (e)

    Stock at 30 June 2012

    $

    $

    (f)

    Your cost of sales
    Take away (f) from (e).

    $

    $

     

    For further information on stock on hand at 1 July 2011, see Opening stock . For information on stock on hand at 30 June 2012, see Closing stock.

    Completing this item

    Step 1  Write your total primary production cost of sales at Cost of sales in the Primary production column, item P8 on page 3 of your schedule. Do not show cents.

    Step 2  If the cost of sales in the Primary production column, after taking away (f) from (e), is a negative amount, print L in the box at the right of this amount.

    Step 3  Write your total non-primary production cost of sales at Cost of sales in the Non-primary production column. Do not show cents.

    Step 4  If the cost of sales in the Non-primary production column, after taking (f) away from (e), is a negative amount, print L in the box at the right of this amount.

    Step 5   Add up your primary production and non-primary production cost of sales and write the total at Cost of sales in the Totals column.

    Step 6   If your total cost of sales is a negative amount, print L in the box at the right of this amount.

    Foreign resident withholding expenses

    Did you have any expenses directly relating to income subject to foreign resident withholding?

    No

    Go to Contractor, sub-contractor and commission expenses.

    Yes

    Read on.

    Completing this item

    Step 1   Write your total non-primary production foreign resident withholding expenses at Foreign resident withholding expenses in the Non-primary production column, item P8 on page 3 of your schedule. Do not show cents.

    Step 2  Transfer the amount you wrote at step 1 to the adjacent Totals box at U.

    You will not have any primary production expense amounts at this item.

    Contractor, sub-contractor and commission expenses

    Did you have any contractor, sub-contractor or commission expenses in your business?

    No

    Go to Superannuation expenses.

    Yes

    Read on.

    You need to know

    These are expenses for labour and services provided under contract, other than salaries or wages - for example:

    • payments to self-employed people, such as consultants and contractors, including payments subject to a PAYG voluntary agreement to withhold, and payments made under a labour-hire arrangement
    • commissions paid to people not receiving a retainer
    • agency fees - for example, for services provided by an advertising agency
    • service fees - for example, plant service
    • management fees
    • consultant fees.

    Do not include the following at this item:

    • expenses for external labour which have been included in the business cost of sales account
    • expenses for accounting or legal services - include these at All other expenses.

    Completing this item

    Step 1  Write your total primary production contractor, sub-contractor and commission expenses at Contractor, sub-contractor and commission expenses in the Primary production column, item P8 on page 3 of your schedule. Do not show cents.

    Step 2  Write your total non-primary production contractor, sub-contractor and commission expenses at Contractor, sub-contractor and commission expenses in the Non-primary production column. Do not show cents.

    Step 3  Add up your primary production and non-primary production contractor, sub-contractor and commission expenses and write the total at F.

    Superannuation expenses

    Did you make any superannuation contributions on behalf of eligible employees or their dependants as a business expense?

    No

    Go to Bad debts.

    Yes

    Read on.

    You need to know

    Show superannuation expenses for the income year. Do not include any amount that was a contribution for yourself. The deduction for your own superannuation contributions must be claimed at item D12 on your tax return (supplementary section) - see question D12 in Individual tax return instructions supplement 2012.

    Employers are entitled to a deduction for the contributions they made to a complying superannuation, provident, benefit or retirement fund or retirement savings account (RSA) where the contributions are to provide superannuation benefits for employees or to provide benefits to the employee's dependants on the employee's death. A deduction is allowable in the income year in which the contributions are made.

    Contributions made to a non-complying fund:

    • are not allowable as a deduction, and
    • do not count towards superannuation guarantee obligations.

    Under the superannuation guarantee, an employer needs to provide a minimum level of superannuation for employees. If the employer does not make the minimum contribution by the relevant date, the employer is required to pay the superannuation guarantee charge on the superannuation guarantee shortfall. The superannuation guarantee charge is not a superannuation contribution and is not tax deductible. Contributions made by employers to offset a superannuation guarantee charge liability are not deductible.

    Contributions paid by an employer to a non-complying superannuation fund on behalf of an employee are generally fringe benefits (other than where the contributions are made for an exempt visitor) and may be subject to tax under the Fringe Benefits Tax Assessment Act 1986.

    There is no limit on the amount of contributions that can be claimed as a deduction by an employer contributing to a complying superannuation fund or RSA for employees under the age of 75 years old. However, the employee may be subject to excess concessional contributions tax if their concessional contributions in the financial year exceed $25,000. This tax is levied at the rate of 31.5% on the amount by which the employee's concessional contributions in a financial year exceed their concessional contributions cap. A transitional arrangement allows a higher cap of $50,000 for concessional contributions for the 2011-12 income year for individuals aged 50 years old or older on the last day of the income year.

    If an employee is 75 years old or older, there is a restriction on the deduction that can be claimed for an employer contribution to a complying superannuation fund or RSA. For contributions made after the 28th day of the month following the employee's 75th birthday, the deduction claimable is limited to the amount of the contribution required under an industrial award, determination or notional agreement preserving state awards.

    Completing this item

    Step 1   Write your total primary production superannuation contributions at Superannuation expenses in the Primary production column, item P8 on page 3 of your schedule. Do not show cents.

    Step 2   Write your total non-primary production superannuation contributions at Superannuation expenses in the Non-primary production column. Do not show cents.

    Step 3   Add up your primary production and non-primary production superannuation contributions and write the total at G.

    Bad debts

    Did you write off any bad debts in your business?

    No

    Go to Lease expenses.

    Yes

    Read on.

    You need to know

    Include income from the recovery of bad debts in Other business income at I or J in the Income section of item P8.

    You are not allowed a deduction for bad debts unless you have previously included the amount in your assessable income or it is for money you lent in the ordinary course of a money-lending business carried on by you.

    Before you can claim a bad debt, it must be bad and not merely doubtful. The question of whether a debt is a bad debt will depend on the facts in each case and, where applicable, the action taken for recovery.

    Do not include accounting provisions for doubtful debts at I. You show them in the Expenses section at All other expenses, then add them back at H Expense reconciliation adjustments in the Reconciliation items section.

    For more information, see Taxation Ruling TR 92/18 - Income tax: bad debts.

    You can also claim a deduction for:

    • partial debt write-offs; where only part of a debt is bad and is written off, you may claim a deduction for the amount written off
    • losses incurred in debt-for-equity swaps for debt written off; where under an arrangement you discharge, release or otherwise extinguish the whole or part of a debt owed to you in return for equity in the debtor.

    You can claim a deduction for the difference between the amount of the debt and the greater of the market value of the equity at the time of issue or the value of the equity recorded in your books at the time of issue. The market value of the equity is the price quoted on the stock exchange or, if the equity is not listed, the net asset backing of the equity.

    Where you are not in the business of lending money, the deduction is limited to the amount of the debt you have included in assessable income.

    Records you need to keep

    Keep a statement for all debtors whose bad debts you wrote off during the year, showing:

    • their name and address
    • the amount of the debt
    • the reason you regarded the debt as bad
    • the year that you returned the amount as income.

    Completing this item

    Step 1   Write your total primary production bad debts at Bad debts in the Primary production column, item P8 on page 3 of your schedule. Do not show cents.

    Step 2   Write your total non-primary production bad debts at Bad debts in the Non-primary production column. Do not show cents.

    Step 3   Add up your primary production and non-primary production bad debts and write the total at I.

    Lease expenses

    Did you have lease expenses in your business?

    No

    Go to Rent expenses.

    Yes

    Read on.

    You need to know

    This is expenditure incurred on financial leases and on operating leases for assets such as motor vehicles and plant. Do not include the cost of leasing real estate (show this cost at K Rent expenses) or capital expenditure incurred to terminate a lease or licence. However, a five-year straight-line write-off is allowed for certain capital expenditure incurred to terminate a lease or licence if the expenditure is incurred in the course of carrying on a business, or in connection with ceasing to carry on a business. See worksheet 4 and note 3 and the details under Change 3 in the fact sheet Other capital expenses.

    In some circumstances, lease expenses may be debt deductions for the purposes of the thin capitalisation rules.

    If you include an amount of lease expense which is not allowable as a deduction, such as amounts disallowed under the thin capitalisation rules, you will need to add back the amount at H Expense reconciliation adjustments in the Reconciliation items section on your schedule.

    Expenses incurred under a hire purchase agreement are not lease expenses. Such expenses are dealt with at H Expense reconciliation adjustments in the Reconciliation items on your schedule.

    Special rules apply to leased cars if the cost of the car exceeds the car limit that applies for the financial year in which the lease commences. The car limit for 2011-12 is $57,466.

    If you lease a car that is subject to the special rules, the reconciliation between the lease expense and the tax treatment is carried out at H Expense reconciliation adjustments in the Reconciliation items section. For more information, see Luxury car leasing.

    Records you need to keep

    List the assets leased and keep full details of the leasing expenses for each item, including motor vehicles, and details of any private use. Leasing expenses of certain cars fall under the substantiation rules.

    Completing this item

    Step 1  Write your total primary production lease expenses at Lease expenses in the Primary production column, item P8 on page 3 of your schedule. Do not show cents.

    Step 2  Write your total non-primary production lease expenses at Lease expenses in the Non-primary production column. Do not show cents.

    Step 3  Add up your primary production and non-primary production lease expenses and write the total at J.

    Rent expenses

    Did you have rent as a business expense?

    No

    Go to Interest expenses within Australia.

    Yes

    Read on.

    You need to know

    This is expenditure you incurred as a tenant for rental of land and buildings used in the production of income - include the cost of leasing real estate.

    Completing this item

    Step 1  Write your total primary production rent expenses at Rent expenses in the Primary production column, item P8 on page 3 of your schedule. Do not show cents.

    Step 2  Write your total non-primary production rent expenses at Rent expenses in the Non-primary production column. Do not show cents.

    Step 3  Add up your primary production and non-primary production rent expenses and write the total at K.

    Interest expenses within Australia

    Did you incur interest as a business expense on money borrowed within Australia?

    No

    Go to Interest expenses overseas.

    Yes

    Read on.

    You need to know

    Include interest you incurred on money borrowed within Australia to acquire income-producing assets used in your business, to finance business operations or to meet current business expenses.

    Do not include interest incurred in deriving rental income. Claim this at item 21 on your tax return (supplementary section).

    If you include an amount of interest which is not allowable as a deduction, such as amounts denied by the thin capitalisation rules, you will need to add back the amount at H Expense reconciliation adjustments in the Reconciliation items section on your schedule.

    Completing this item

    Step 1  Write your total primary production interest expenses within Australia at Interest expenses within Australia in the Primary production column, item P8 on page 3 of your schedule. Do not show cents.

    Step 2  Write your total non-primary production interest expenses within Australia at Interest expenses within Australia in the Non-primary production column, item P8 on your schedule. Do not show cents.

    Step 3  Add up your primary production and non-primary production interest expenses within Australia and write the total at Q.

    Interest expenses overseas

    Did you incur interest as a business expense on money borrowed overseas?

    No

    Go to Depreciation expenses.

    Yes

    Read on.

    You need to know

    Include any interest incurred on money borrowed from overseas sources to acquire income-producing assets used in your business, to finance business operations or to meet current business expenses.

    Do not include interest incurred in deriving rental income. Claim this at item 21 on your tax return (supplementary section).

    Generally, you are required to withhold an amount of withholding tax from interest paid or payable to non-residents and from interest derived by a resident through an overseas branch. You must send these amounts to us. You cannot deduct an interest expense if you were required to withhold tax on that interest and you failed to do so.

    If you paid or credited any interest or amounts in the nature of interest to a non-resident of Australia or to a resident's overseas branch, you will need to provide additional information. Print SCHEDULE OF ADDITIONAL INFORMATION - ITEM 15 on the top of a separate piece of paper. Show the name and address of each recipient, total amounts paid or credited to each non-resident or overseas branch of a resident and the amount of tax withheld. If no tax was withheld, state the reason for this. Include your name, address and TFN. Print X in the YES box at Taxpayer's declaration question 2a on your tax return. Attach the schedule to page 3 of your tax return.

    For more information on the tax treatment of interest paid to non-residents, phone 13 28 66.

    If you include an amount of interest which is not allowable as a deduction, such as amounts denied by the thin capitalisation rules, you will need to add back the amount at H Expense reconciliation adjustments in the Reconciliation items section on your schedule.

    Completing this item

    Step 1   Write your total primary production overseas interest expenses at Interest expenses overseas in the Primary production column, item P8 on page 3 of your schedule. Do not show cents.

    Step 2   Write your total non-primary production overseas interest expenses at Interest expenses overseas in the Non-primary production column. Do not show cents.

    Step 3   Add up your primary production and non-primary production overseas interest expenses and write the total at R.

    Depreciation expenses

    Did you have depreciation as a business expense?

    No

    Go to Motor vehicle expenses.

    Yes

    If you are a small business entity and are choosing to use the simplified depreciation rules, read on. Otherwise go to Other businesses.

    Continuing small business pools

    If you are not carrying on a business this year, but in a prior year you allocated assets to a general small business pool or long-life small business pool (or the law allocated the assets to such a pool), do not include the pool deductions at this item. Show such deductions at item D15 on your tax return (supplementary section).

    Small business entities

    You need to know

    You show at M Depreciation expenses item P8 the total depreciation deductions being claimed under the small business entity capital allowances (depreciation) rules and for the business use of other assets under the uniform capital allowances (UCA) rules. This includes your deduction under the small business entity rules for depreciating assets used for work-related or self-education purposes. However, this excludes any amount included at part B of item P1.

    You do not need to complete a Capital allowances schedule 2012 (NAT 3424).

    Small business entities can claim an immediate deduction for most depreciating assets costing less than $1,000 (excluding input tax credit entitlements) and can pool most of their other depreciating assets. There are two small business pools:

    • a general small business pool for depreciating assets with an effective life of less than 25 years, and
    • a long-life small business pool for depreciating assets with an effective life of 25 years or more.

    Some depreciating assets are excluded from these simplified depreciation rules, but a deduction may be available under the UCA rules.

    If you are a small business entity and are choosing to use these simplified depreciation rules, you must use immediate write-off and pooling as applicable. You cannot choose to use one and not the other.

    For more information about the small business entity depreciation rules, read Simplified depreciation rules or phone 13 28 66.

    Calculating your depreciation deductions

    If your accounting system or financial statements provide you with the amounts to complete worksheet 2, write these amounts in the worksheet. Otherwise, use calculations 1 to 5 below to calculate your depreciation deductions.

    The amounts you write in worksheet 2 must be tax values and not accounting values.

    Calculation 1: Low-cost assets

    A low-cost asset is an asset:

    • whose cost at the end of the income year in which you started to use it for a taxable purpose, or had it installed ready for such use, was less than $1,000 (excluding input tax credit entitlements), and
    • that qualifies for a deduction under the small business entity depreciation rules.

    Work out the taxable purpose proportion of each depreciating low-cost asset you acquired in 2011-12 and used, or held ready for use, for the purpose of producing assessable income. You calculate the deduction for each eligible asset as follows:

    asset's adjustable value x taxable purpose proportion

    Add up these results and write the total at (a) in worksheet 2.

    Do not include depreciating assets which cost less than $1,000 (excluding input tax credit entitlements) that you acquired before commencing to use these simplified depreciation rules. You allocate these assets to the general small business pool (see calculation 2).

    The adjustable value of a depreciating low-cost asset, at the time you first used it (or held it ready for use) for a taxable purpose, will be its cost, unless you previously used or held the asset solely for private purposes - for example, for a tool set bought on 1 December at a cost of $800 (excluding input tax credit entitlements) and used for producing assessable income from that date at an estimated 70% of the time, the immediate deduction would be $800X70% = $560.

    Definitions

    Adjustable value of a depreciating asset is its cost (excluding input tax credit entitlements) less its decline in value since you first used it or installed it ready for use for any purpose, including a private purpose.

    Assessable balancing adjustment amount arises where the termination value of the depreciating asset is more than the adjustable value.

    Cost addition amounts include the cost of capital improvements to assets and costs reasonably attributable to disposing of or permanently ceasing to use an asset (this may include advertising and commission costs or the costs of demolishing the asset).

    Decline in value (previously 'depreciation') is the value that an asset loses over its effective life.

    Deductible balancing adjustment amount arises where the termination value of the depreciating asset is less than the adjustable value.

    Depreciating asset is an asset with a limited effective life which declines in value over that life.

    Taxable purpose includes the purpose of producing assessable income.

    Taxable purpose proportion is the extent to which you use the asset for a taxable purpose, such as for the purpose of producing assessable income.

    Termination value includes money received from the sale of an asset or insurance money received as the result of the loss or destruction of an asset. Exclude the GST component where the amount received is for a taxable supply.

    Calculation 2: Small business pool deductions

    To calculate your deductions for both the general and long-life small business pools you must first calculate the opening pool balance of each pool.

    If 2011-12 was the first income year for which you were a small business entity, your opening pool balance of a general or long-life pool is the sum of the taxable purpose proportions of the adjustable values of the depreciating assets that were used, or held for use, just before the start of 2011-12, and that were not excluded from the simplified depreciation rules.

    Allocate each depreciating asset you hold at the start of the income year to the appropriate pool according to the asset's effective life. Include only the taxable purpose proportion of the adjustable value of each depreciating asset - for example, for an asset with an adjustable value of $10,000 that is used only 50% for an income-producing purpose, you will add only $5,000 to the pool.

    You can choose not to allocate an asset to your long-life small business pool if you first used it, or installed it ready for use, for a taxable purpose before 1 July 2001.

    For an income year that is not the first income year for which you were a small business entity, the opening pool balance of each small business pool is the closing pool balance for the previous income year, except where you make an adjustment to reflect the changed business use of a pooled asset.

    Calculate your deduction for each small business pool as follows.

    General small business pool deduction:

    opening pool balance ($) x 30%

    Long-life small business pool deduction:

    opening pool balance ($) x 5%

    Where necessary, make a reasonable apportionment for each small business pool deduction between primary production and non-primary production activities.

    Write the result of your general small business pool deduction at (b) in worksheet 2.

    Write the result of your long-life small business pool deduction at (c) in worksheet 2.

    If either pool balance is below $1,000 (after taking into account additions and disposals but before working out the deductions in calculations 2 and 3), you instead work out the deduction for the pool using calculation 5(b).

    Calculation 3: Depreciating assets first used for a taxable purpose during 2011-12 and cost addition amounts for assets already allocated to a pool

    You calculate your deduction at half the relevant pool rate for:

    • depreciating assets that you first used or installed ready for use for a taxable purpose during the year, and
    • cost addition amounts for assets already allocated to a small business pool.

    (This calculation does not apply to any asset allocated to an opening pool balance in calculation 2.)

    Calculate your deduction as follows:

    • the taxable purpose proportion of the adjustable value of each depreciating asset first used for a taxable purpose this year multiplied by 15% (general pool assets) or 2.5% (long-life pool assets), plus
    • the taxable purpose proportion of the cost addition amounts multiplied by 15% (general pool assets) or 2.5% (long-life pool assets).

    Write the total deduction for general pool assets at (d) and the total deduction for long-life pool assets at (e) in worksheet 2.

    Calculation 4: Other depreciating assets

    Work out your deduction for the decline in value of all your other depreciating assets that are not included in calculations 1 to 3.

    See the Guide to depreciating assets 2012 (NAT 1996) for information on how to calculate the decline in value of these assets.

    Write your total deduction for other depreciating assets at (f) in worksheet 2.

    Do not include at (f) in the worksheet depreciating assets which qualify for a deduction under Subdivision 40-F or 40-G of the ITAA 1997 as water facilities or landcare operations in your primary production business and for which you have chosen to claim a deduction under those Subdivisions and not these small business entity depreciation rules. Show these deductions at W Landcare operations and business deduction for decline in value of water facility item P8 Reconciliation items.

    Calculation 5: Disposal of depreciating assets

    (a) Low-cost assets

    If you have disposed of a low-cost asset for which you have claimed an immediate deduction in calculation 1 this year or in a prior year, include the taxable purpose proportion of the termination value in the Reconciliation items section of item P8 - for example, for a low-cost asset used only 50% for an income-producing purpose, which was sold for $200 (excluding GST), only $100 will be assessable and included as a reconciliation adjustment.

    (b) Assets allocated to small business pools

    Where you dispose of depreciating assets that have been allocated to either the general or long-life pools, you deduct the taxable purpose proportion of the termination value from the closing pool balance - for example, for a pooled depreciating asset used only 50% for an income-producing purpose, which was sold for $3,000 (excluding GST), only $1,500 will be deducted from the closing pool balance. If the balance of a pool is below $1,000 but greater than zero (after taking into account any additions and disposals but before calculating the deductions in calculations 2 and 3) you can claim an immediate deduction for this amount. Write this deduction against the appropriate pool at (b) or (c) in worksheet 2.

    If the closing pool balance is less than zero, you include the amount below zero in your assessable income in the Reconciliation items section of item P8.

    If expenses are incurred in disposing of a depreciating asset, these expenses may be taken into account in calculation 3.

    (c) Other depreciating assets

    Note: See the Guide to depreciating assets 2012 for information on how to calculate any balancing adjustment amounts on the disposal of other depreciating assets.

    Balancing adjustment amounts are included in the Reconciliation items section of item P8. See What are income reconciliation adjustments? and What are expense reconciliation adjustments?

    Closing pool balance

    The closing balance of each small business pool for an income year is:

    • the opening pool balance (see calculation 2), plus
    • the taxable purpose proportion of the adjustable value of assets that were first used, or installed ready for use, for a taxable purpose during the year (see calculation 3), plus
    • the taxable purpose proportion of any cost addition amounts for assets in the pool during the year (see calculation 3), less
    • the taxable purpose proportion of the termination value of any pooled assets disposed of during the year [see calculation 5(b)], less
    • the small business pool deduction (see calculation 2), less
    • the deduction for assets first used by you during the year (see calculation 3), less
    • the deduction for any cost addition amounts for pooled assets during the year (see calculation 3).

    If your closing pool balance is less than zero, see calculation 5(b).

    The closing pool balance for this year becomes the opening pool balance for 2012-13 except where you made an adjustment to reflect the changed business use of a pooled asset.

    You will need your opening pool balance to work out the pool deduction next year. Do not write your closing pool balance on your tax return (supplementary section).

    Worksheet 2: Depreciation deductions for small business entities

     

    Primary production
    ($)

    Non-primary production
    ($)

    Total
    ($)

     

    Low-cost assets

     

     

     

    (a)

    General pool

     

     

     

    (b)

    Long-life pool

     

     

     

    (c)

    General pool (1/2 rate)

     

     

     

    (d)

    Long-life pool (1/2 rate)

     

     

     

    (e)

    Other assets

     

     

     

    (f)

    Depreciation
    expenses: add (a), (b), (c), (d), (e) and (f).

     

     

     

    (g)

    Completing this item

    Step 1   Write your total primary production depreciation deductions at Depreciation expenses in the Primary production column, item P8 on page 3 of your schedule. Do not show cents.

    Step 2   Write your total non-primary production depreciation deductions at Depreciation expenses in the Non-primary production column. Do not show cents.

    Do not show any amount included at part B of item P1.

    Step 3   Transfer the amount at (g) in worksheet 2 to M Depreciation expenses item P8. Do not show cents.

    Step 4  Transfer the amount at (a) in worksheet 2 to A item P10 Small business entity depreciating assets on page 4 of your schedule. Do not show cents.

    Step 5   Add up the amounts at (b) and (d) in worksheet 2 and write the total at B item P10. Do not show cents.

    Step 6   Add up the amounts at (c) and (e) in worksheet 4 and write the total at C item P10. Do not show cents.

    Step 7   Go to Motor vehicle expenses.

    Five-year restriction

    If you are a small business entity and have chosen to use these simplified depreciation rules but then, in a later year, choose to stop using this concession, you cannot choose to use the simplified depreciation rules again until at least five years after the income year in which you chose to stop using the rules.

    Other businesses

    You need to know

    You show at M Depreciation expenses item P8 the depreciation claimed in your books of account other than for those assets allocated in a prior year to a general pool or a long-life pool. For assets allocated to such a pool, include here the amount of the pool deduction to be claimed for tax purposes. For further information, see Definitions.

    The depreciation amount shown at M item P8 should not include profit or loss on the sale of depreciating assets. You should include profits on the sale of depreciating assets in Other business income at I or J in the Income section of item P8 on your schedule. You should include losses on the sale of depreciating assets at PAll other expenses in the Expenses section.

    Accounting or book depreciation may differ from the deduction for the decline in value of depreciating assets.

    You carry out the reconciliation between accounting depreciation and the deduction for decline in value at H Expense reconciliation adjustments in the Reconciliation items section of item P8.

    You can use the decline in value calculator on our website to calculate the decline in value of these assets or see the Guide to depreciating assets 2012 for more information on how to calculate decline in value.

    Is expenditure revenue or capital in nature?

    Law Administration Practice Statement PS LA 2003/8 - Taxation treatment of expenditure on low cost items for taxpayers carrying on a business provides guidance on two straightforward methods that can be used by taxpayers carrying on a business to help determine whether expenditure incurred to acquire certain low-cost items is to be treated as revenue expenditure or capital expenditure.

    Subject to certain qualifications, the two methods cover expenditure below a threshold and the use of statistical sampling to estimate total revenue expenditure on low-cost items. The threshold rule allows an immediate deduction for qualifying low-cost business items costing $100 or less. The sampling rule allows taxpayers with a low-value pool to use statistical sampling to determine the proportion of the total purchases on qualifying low-cost business items that are revenue expenditure.

    We will accept a deduction for expenditure incurred on low-cost assets calculated in accordance with this Practice Statement.

    Completing this item

    Step 1  Write your total primary production depreciation expenses at Depreciation expenses in the Primary production column, item P8 on page 3 of your schedule. Do not show cents.

    Step 2   Write your total non-primary production depreciation expenses at Depreciation expenses in the Non-primary production column. Do not show cents.

    Step 3  Add up your primary production and non-primary production depreciation expenses and write the total at M Depreciation expenses.

    Motor vehicle expenses

    Did you have motor vehicle expenses in your business?

    No

    Go to Repairs and maintenance.

    Yes

    Read on.

    You need to know

    Special substantiation and calculation rules for car expenses apply to an individual. Under these rules, motor vehicle expenses can be claimed using one of four methods where the expense is for a motor car, station wagon, panel van, utility truck or other road vehicle designed to carry a load of less than one tonne or fewer than nine passengers. For an explanation of these methods, see question D1 in Individual tax return instructions 2012.

    Do not include depreciation, finance leasing charges or interest paid. You should include these at M Depreciation expenses, J Lease expenses, Q Interest expenses within Australia or R Interest expenses overseas item P8 on your schedule.

    Completing this item

    Step 1   Write your total primary production motor vehicle expenses at Motor vehicle expenses in the Primary production column, item P8 on page 3 of your schedule. Do not show cents.

    Step 2  Write your total non-primary production motor vehicle expenses at Motor vehicle expenses in the Non-primary production column. Do not show cents.

    Step 3  Add up your primary production and non-primary production motor vehicle expenses and write the total at N item P8 on your schedule.

    Step 4  If you worked out the amount you are claiming for motor vehicle expenses using one of the four methods described in question D1 in Individual tax return instructions 2012, find the code letter that identifies the method you used and print it in the Type box at the right of the amount at N.

    S if you used the 'cents per kilometre' method
    T if you used the '12% of original value' method
    O if you used the 'one-third of actual expenses' method
    B if you used the 'logbook' method.

    Print the code letter N in the TYPE box if the amount shown at N relates to a:

    • motorcycle
    • taxi taken on hire
    • road vehicle designed to carry a load of one tonne or more, or nine or more passengers
    • any other motor vehicle expenses covered by question D2 in Individual tax return instructions 2012.

    If you have more than one code, print the code that applies to the largest claim.

    Repairs and maintenance

    Did you have repairs and maintenance as a business expense?

    No

    Go to All other expenses.

    Yes

    Read on.

    You need to know

    This is expenditure shown in your accounts for repairs and maintenance of premises, plant, machinery, implements, utensils, rolling stock or articles associated with the production of income. Any non-deductible expenditure, such as items of a capital nature or amounts relating to private use of an item, included at this item, should also be included at H Expense reconciliation adjustments in the Reconciliation items section item P8 on your schedule. The following information on deductions for repairs will assist you to work out whether you need to make an expense reconciliation adjustment.

    Repairs

    You may deduct the cost of repairs (not being expenditure of a capital nature) to premises and depreciating assets such as plant, machinery or equipment used solely for producing assessable income, or in carrying on a business for that purpose.

    Expenditure on repairs to property used partially for business or income-producing purposes (for example, where the property is also used for private purposes or in the production of exempt income) is deductible only to the extent that is reasonable, taking account of such use.

    Where items are newly acquired, including by way of a legacy or gift, the cost of repairs to defects in existence at the time of acquisition is generally of a capital nature.

    Expenditure incurred in making alterations, additions or improvements is of a capital nature and is not deductible.

    For further information on deductions for repairs, see Taxation Ruling TR 97/23 - Income tax: deductions for repairs.

    Records you need to keep

    To support your claim for the cost of repairs, you must keep full details, including source documents, of the nature and cost of repairs to each item.

    Completing this item

    Step 1   Write your total primary production repairs and maintenance expenses at Repairs and maintenance in the Primary production column, item P8 on page 3 of your schedule. Do not show cents.

    Step 2  Write your total non-primary production repairs and maintenance expenses at Repairs and maintenance in the Non-primary production column. Do not show cents.

    Step 3  Add up your primary production and non-primary production repairs and maintenance expenses and write the total at O. Do not show cents.

    All other expenses

    Did you have any other business expenses?

    No

    Go to Total expenses.

    Yes

    Read on.

    You need to know

    This is the total of all other expenses which you incurred in deriving your profit or loss and which you have not already shown elsewhere at item P8. Other expenses include wages, accounting and professional fees, advertising, office supplies, foreign exchange (forex) losses and any loss on the sale of a depreciating asset as shown in your accounts.

    You should also include gifts and donations that are a business expense and amounts you pay professionals in managing the tax affairs of the business at item P8. You should not claim these amounts at the gifts and donations label or the cost of managing tax affairs label on your individual tax return.

    For more information about forex losses, visit our website or see question D15 in Individual tax return instructions supplement 2012.

    You should also include capital and other non-deductible items (including debt deductions denied by thin capitalisation rules) shown here at H Expense reconciliation adjustments in the Reconciliation items section of item P8 on your schedule. For further information, see Income and expense reconciliation adjustments.

    For further information, see Thin capitalisation.

    Home office expenses

    If part of your home was specifically set aside as your place of business and used solely for the purpose of conducting your business affairs and you had no other place from where they were mainly carried on, the following expenses are partly deductible:

    • occupancy expenses, including rent, mortgage interest, rates, and house and contents insurance
    • running expenses, including electricity, cleaning, depreciation, leasing charges and repairs to furniture and furnishings in the office.

    In most cases, you can apportion expenses on a floor area basis and, if the area of your home was a place of business for only part of the year, on a time basis.

    Where you used part of your home as a home office but it did not qualify as a place of business, only the additional running expenses you incurred may be deductible.

    For further details, see Taxation Ruling TR 93/30 - Income tax: deductions for home office expenses and Law Administration Practice Statement PS LA 2001/6 - Home office expenses: diaries of use and calculation of home office expenses.

    Records you need to keep

    You should keep records to show how you have calculated your home office expenses. We may ask you for these at a later date.

    Completing this item

    Step 1  Write your total 'other' primary production expenses at All other expenses in the Primary production column, item P8 on page 3 of your schedule. Do not show cents.

    Step 2   Write your total 'other' non-primary production expenses at All other expenses in the Non-primary production column. Do not show cents.

    Step 3   Add up your 'other' primary production and 'other' non-primary production expenses and write the total at P item P8 on your schedule.

    Total expenses

    Completing this item

    Step 1  Add up all the expenses you have written in the Primary production column, from Cost of sales down to and including All other expenses. Write the total at S item P8 on page 3 of your schedule. Do not show cents.

    Step 2  If your total of primary production expenses is a negative amount, print L in the box at the right of the amount at S.

    Step 3  Add up all the expenses you have written in the Non-primary production column, from Cost of sales down to and including All other expenses. Write the total at T. Do not show cents.

    Step 4   If your total of non-primary production expenses is a negative amount, print L in the box at the right of the amount at T.

    Step 5  Add up your primary production and non-primary production expenses. Write the total at TOTAL EXPENSES in the Totals column.

    Step 6   If your total expenses is a negative amount, print L in the box at the right of this amount.

    Reconciliation items

    Consider the following items to see whether you qualify for a deduction.

    Any adjustments to your income and expense amounts are dealt with at Income and expense reconciliation adjustments.

    Deduction for environmental protection expenses

    Did you have a business expense for environmental protection activities?

    No

    Go to Section 40-880 deduction.

    Yes

    Read on.

    You need to know

    Show here the amount of allowable expenditure on environmental protection activities (EPA).

    You can deduct expenditure to the extent that you incur it for the sole or dominant purpose of carrying on EPA. EPA are activities undertaken to prevent, fight or remedy pollution, or to treat, clean up, remove or store waste from your earning activity. Your earning activity is one you carried on, carry on or propose to carry on for the purpose of:

    • producing assessable income (other than a net capital gain)
    • exploration or prospecting, or
    • mining site rehabilitation.

    You may also claim a deduction for cleaning up a site on which a predecessor carried on substantially the same business activity.

    The deduction is not available for:

    • EPA bonds and security deposits
    • expenditure for acquiring land
    • expenditure for constructing or altering buildings, structures or structural improvements
    • expenditure to the extent that you can deduct an amount for it under another provision.

    Accordingly, expenditure which forms part of the cost of a depreciating asset is not deductible as expenditure on EPA if a deduction is available for the decline in value of the asset. See the Guide to depreciating assets 2012 for information on the deduction for decline in value.

    Expenditure incurred on or after 19 August 1992 on certain earthworks constructed as a result of carrying out EPA can be written off at the rate of 2.5% per annum under the provisions for capital works expenditure.

    Expenditure on an environmental assessment of a project is not deductible as expenditure on EPA. If it is capital expenditure directly connected with a project, it could be a project amount for which a deduction would be available over the project life; see Business deduction for project pool. An example would be a study to determine the quantity and type of pollutants which will be produced from a process used in a proposed business.

    If the deduction arises from a non-arm's length transaction and the expenditure is more than the market value of what it was for, the amount of the expenditure is instead taken to be that market value.

    Any recoupment of the expenditure would be assessable income.

    Completing this item

    Step 1  Write your total primary production EPA expenses at Deduction for environmental protection expenses in the Primary production column, item P8 on page 3 of your schedule. Do not show cents.

    Step 2   Write your total non-primary production EPA expenses at Deduction for environmental protection expenses in the Non-primary production column. Do not show cents.

    Step 3  Add up your primary production and non-primary production EPA expenses and write the total at V.

    Section 40-880 deduction

    Can you deduct business-related costs under section 40-880?

    No

    Go to Business deduction for project pool.

    Yes

    Read on.

    You need to know

    Section 40-880 provides a five-year write-off for certain capital expenditure incurred by you in relation to a past, present or prospective business if the expenditure is not already taken into account or not denied a deduction by another provision.

    You can claim a deduction for capital expenditure:

    • in relation to your business
    • in relation to a business that used to be carried on, such as capital expenses incurred in order to cease the business
    • in relation to a business proposed to be carried on, such as the costs of feasibility studies, market research or setting up the business entity
    • as a shareholder, beneficiary or partner to liquidate or deregister a company or to wind up a trust or partnership (the company, trust or partnership must have carried on a business).

    If you incur expenditure in relation to your existing business, a business that you used to carry on or a business that you propose to carry on, the expenditure is deductible to the extent the business is, was or is proposed to be carried on for a taxable purpose.

    You cannot deduct expenditure in relation to an existing business that is carried on by another entity. However, you can deduct expenditure you incur in relation to a business that used to be, or is proposed to be, carried on by another entity. The expenditure is only deductible to the extent that:

    • the business was, or is proposed to be, carried on for a taxable purpose, and
    • the expenditure is in connection with the business that was or is proposed to be carried on and with you deriving assessable income from the business.

    Generally, you can deduct 20% of the expenditure in the year you incur it and in each of the following four years. However, for some pre- and post-business expenditure you may have to defer your claim for a deduction because the non-commercial loss rules apply.

    For example, if you were carrying on a business during the year, but your relevant capital expenditure relates to a new business that did not commence before 30 June 2011, you generally cannot claim a deduction for the expenses incurred until the business activity commences. If you incur such expenditure in these circumstances, you should not claim the deductible amount (20%) but note it in your business or taxation records and claim all the amounts deferred for this item in the year the business commences.

    The deduction cannot be claimed for capital expenditure if it:

    • can be deducted under another provision
    • forms part of the cost of a depreciating asset you hold, used to hold or will hold
    • forms part of the cost of land
    • relates to a lease or other legal or equitable right
    • would be taken into account in working out an assessable profit or deductible loss
    • could be taken into account in working out a capital gain or a capital loss
    • would be specifically not deductible under the income tax laws if the expenditure was not capital expenditure
    • is specifically not deductible under the income tax laws for a reason other than the expenditure is capital expenditure
    • is of a private or domestic nature
    • is incurred in relation to gaining or producing exempt income or non-assessable non-exempt income
    • is excluded from the cost or cost base of an asset because, under special rules in the UCA or capital gains tax regimes respectively, the cost or cost base of the asset was taken to be the market value
    • is a return of or on capital or is a return of a non-assessable amount (for example, repayments of loan principal).

    Claim the amount deductible under section 40-880 here if you carried on a business as an individual at any time during the year.

    If you have incurred relevant capital expenses that relate to a business that ceased in a previous income year and you carried on the business as a sole trader or through a partnership, claim the expenses here. If you carried on the business through a company or trust, you claim the amount deductible (20%) at item D15 on your tax return (supplementary section).

    You must show any recoupment of the expenditure as assessable income, either at Other business income or as part of your Income reconciliation adjustments in the Reconciliation items section of item P8 on your schedule.

    Completing this item

    Step 1  Write your deduction for primary production business-related costs at Section 40-880 deduction in the Primary production column, item P8 on page 3 of your schedule. Do not show cents.

    Step 2   Write your deduction for non-primary production business-related costs at Section 40-880 deduction in the Non-primary production column. Do not show cents.

    Step 3   Add up your primary production and non-primary production deductions for business-related costs and write the total at A.

    Business deduction for project pool

    Did you have capital expenditure directly connected with a business project?

    No

    Go to Small business and general business tax break. .

    Yes

    Read on.

    You need to know

    Certain capital expenditure you incurred after 30 June 2001 which is directly connected with a project you carry on or propose to carry on for a taxable purpose can be allocated to a project pool and written off over the life of the project. Each project has a separate project pool. The project must be of sufficient substance and be sufficiently identified that it can be shown that the capital expenditure said to be a 'project amount' is directly connected with the project.

    You are carrying on a project if it involves a continuity of activity and active participation - however, simply holding a passive investment, such as a rental property, would not be regarded as carrying on a project.

    Such capital expenditure, known as a project amount, is expenditure incurred on:

    • creating or upgrading community infrastructure for a community associated with the project - this expenditure must be paid (not just incurred) to be a project amount
    • site preparation for depreciating assets (other than to drain swamp or low-lying land or to clear land for horticultural plants, including grapevines)
    • feasibility studies for the project
    • environmental assessments for the project
    • obtaining information associated with the project
    • seeking to obtain a right to intellectual property
    • ornamental trees or shrubs.

    Project amounts also include mining capital expenditure and expenditure on certain facilities used to transport minerals or quarry materials. For more information on these project amounts, see the Guide to depreciating assets 2012.

    The expenditure must not be otherwise deductible or form part of the cost of a depreciating asset. If the expenditure incurred arises from a non-arm's length dealing and is more than the market value of what it was for, the amount of the expenditure is taken to be that market value.

    Project amounts are allocated to a 'project pool'. Your deduction for project amounts allocated to a project pool is spread over the 'project life'. The project life is the period from the date on which the project starts to operate until the date on which it stops operating. The period must be limited by something inherent in the project. If there is no limited project life, no deduction is available under these rules.

    A deduction is available from the income year in which you started to operate a project to gain or produce assessable income. The deduction is worked out on the value of the project pool at the end of the income year at the rate of 150%. For pools containing only project amounts incurred on or after 10 May 2006 for projects starting on or after that day, the rate is 200%. Your deductions are capped at 150% if on or after 10 May 2006 you abandon, sell or otherwise dispose of an existing project and then restart it after that date in circumstances where it would be reasonable to conclude that this was done for the main purpose of ensuring that deductions would be calculated using the higher rate.

    Use worksheet 3A or worksheet3B to work out your deduction. For projects which started to operate on or after 10 May 2006 the calculation is as follows:

    Worksheet 3A: Project pool deduction for projects which started on or after 10 May 2006

    Value of the project pool at 30 June 2012. This is the closing pool value for 2010-11 (if any) plus the sum of the project amounts you allocated to the pool in 2011-12.

    $

    (a)

    Your estimate of the life of the project (in years).

    years

    (b)

    Divide (a) by (b).

    $

    (c)

    Multiply (c) by 200%. This is your 2011-12 deduction for the project pool.

    $

    (d)

    Your deduction at (d) must not be more than the amount at (a).

    If a project operated in 2011-12 for purposes other than earning assessable business income, you must reduce your deduction at (d) by a reasonable amount for the extent to which the project operated for such other purposes.

    Worksheet 3B: Project pool deduction for projects which started before 10 May 2006

    Value of the project pool at 30 June 2012. This is the closing pool value for 2010-11 (if any) plus the sum of the project amounts you allocated to the pool in 2011-12.

    $

    (a)

    Your estimate of the life of the project (in years).

    years

    (b)

    Divide (a) by (b).

    $

    (c)

    Multiply (c) by 150%. This is your 2011-12 deduction for the project pool.

    $

    (d)

    Your deduction at (d) must not be more than the amount at (a).

    If a project operated in 2011-12 for purposes other than earning assessable business income, you must reduce your deduction at (d) by a reasonable amount for the extent to which the project operated for such other purposes.

    The pool value can be subject to adjustments - for example, a foreign exchange (forex) adjustment may apply where you met an obligation to pay foreign currency incurred as a project amount which you had allocated to a project pool.

    Closing pool value for 2011-12

    This is (a) minus (d) in worksheet 3A and worksheet 3B. You will need the closing pool value for 2011-12 to work out your deduction for the project pool next year.

    Any recoupment of the expenditure must be shown as assessable income either at Other business income or as part of your Income reconciliation adjustments in the Reconciliation items section of item P8 on your schedule.

    Where a project was abandoned, sold or otherwise disposed of in 2011-12

    In this case, whether or not the project had begun to operate, you can claim a deduction for the 2010-11 closing pool value (if any) plus any project amounts allocated to the pool in the 2011-12 year. You must show any proceeds from the abandonment, sale or disposal of the project as assessable income either at Other business income or as part of your Income reconciliation adjustments in the Reconciliation items section of your schedule.

    Completing this item

    Step 1   Write your total primary production project pool business deduction at Business deduction for project pool in the Primary production column, item P8 on page 3 of your schedule. Do not show cents.

    Step 2   Write your total non-primary production project pool business deduction at Business deduction for project pool in the Non-primary production column. Do not show cents.

    Step 3   Add up your primary production and non-primary production project pool business deductions and write the total at L.

    Small business and general business tax break

    Can you claim the small business and general business tax break?

    No

    Go to Landcare operations and business deduction for decline in value of water facility.

    Yes

    Read on.

    You need to know

    The small business and general business tax break, in the form of an investment allowance, is available for expenditure on eligible new tangible depreciating assets. The investment allowance may be available where a small business entity committed to investing in the asset between 13 December 2008 and 31 December 2009 inclusive, and first used the asset, or installed it ready for use, or in the case of new investment in an existing asset brought the asset to its modified or improved state, on or before 30 June 2010 (for the full allowance) or 31 December 2010 (for the reduced allowance).

    2012 is the final year in which a claim for the allowance may be made. A claim for this allowance will, ordinarily, only be available in 2011-2012 to taxpayers with a substituted accounting period (SAP), and will ordinarily be limited to claims for the reduced allowance.

    For further information, see Small business and general business tax break.

    Completing this item

    Step 1   Write your deduction for the tax break for your primary production business at Small business and general business tax break in the Primary production column, item P8 on page 3 of your schedule. Do not show cents.

    Step 2  Write your deduction for the tax break for your non-primary production business at Small business and general business tax break in the Non-primary production column. Do not show cents.

    Step 3  Add up your primary production and non-primary production deductions for the small business and general business tax break and write the total at F.

    Landcare operations and business deduction for decline in value of water facility

    Did you have landcare operations and/or water conservation/conveying expenses?

    No

    Go to Income and expense reconciliation adjustments.

    Yes

    Read on.

    You need to know

    Landcare operations expenses

    You can claim a deduction for capital expenditure you incur on a landcare operation for land in Australia in the year it is incurred.

    If you can deduct expenditure under both the water facilities and landcare operation rules, you can only deduct the expenditure as expenditure on a water facility; see Water conservation and conveyance facilities. If you can deduct expenditure under both the carbon sink forests and landcare operation rules, you can only deduct the expenditure as expenditure on carbon sink forests.

    Unless you are a rural land irrigation water provider, the deduction is available to the extent you use the land for either:

    • a primary production business, or
    • in the case of rural land, a business for the purpose of producing assessable income from the use of that land, except a business of mining or quarrying.

    You may claim the deduction even if you are only a lessee of the land.

    Rural land irrigation water providers can claim a deduction for certain expenditure they incur. A rural land irrigation water provider is an entity whose business is primarily and principally supplying water to entities for use in primary production businesses on land in Australia or businesses (except mining or quarrying businesses) using rural land in Australia. The supply of water by using a motor vehicle is excluded.

    If you are a rural land irrigation water provider, you can claim a deduction for capital expenditure you incurred on a landcare operation for land used by other entities that you supply with water if the land is:

    • land in Australia that those entities use at the time for primary production businesses, or
    • rural land in Australia that those entities use at the time for carrying on businesses for a taxable purpose, except a business of mining or quarrying.

    If you are a rural land irrigation water provider your deduction is reduced by a reasonable amount to reflect an entity's use of the land for other than a taxable purpose in an income year after you incurred the expenditure.

    A landcare operation is one of the following:

    1. erecting fences to separate different land classes in accordance with an approved land management plan
    2. erecting fences primarily and principally to keep animals out of areas affected by land degradation in order to prevent or limit further damage and assist in reclaiming the areas
    3. constructing a levee or similar improvements
    4. constructing drainage works, other than the draining of swamps or low-lying land, primarily and principally to control salinity or assist in drainage control
    5. an operation primarily and principally for eradicating or exterminating animal pests from the land
    6. an operation primarily and principally for eradicating, exterminating or destroying plant growth detrimental to the land
    7. an operation primarily and principally for preventing or combating land degradation other than by erecting fences, or
    8. an extension, alteration or addition to any of the assets described in 1 to 4 above or an extension of an operation described in 5 to 7 above.

    A landcare operation also includes:

    • a repair of a capital nature to an asset described in 1 to 4 above
    • constructing a structural improvement that is reasonably incidental to levees (or similar improvements) or drainage works deductible as capital expenditure on a landcare operation
    • a repair of a capital nature, or an alteration, addition or extension to a structural improvement that is reasonably incidental to levees (or similar improvements) or drainage works deductible as capital expenditure on a landcare operation.

    An example of a structural improvement that may be reasonably incidental to drainage works is a fence constructed to prevent livestock entering a drain that was constructed to control salinity.

    No deduction is available if the capital expenditure is on plant unless it is on certain fences, dams or other structural improvements. Where a levee is constructed primarily and principally for water conservation, it would be a water facility and no deduction would be allowable under these rules. Its decline in value would need to be worked out under the rules for water facilities - see Water conservation and conveyance facilities.

    If the expenditure incurred arose from a non-arm's length dealing and was more than the market value of what the expenditure was for, the amount of the expenditure is taken to be that market value instead.

    These deductions are not available to a partnership. Expenses for landcare operations incurred by a partnership are allocated to each partner, who can then claim the relevant deduction for their share of the expenditure.

    You may need to show any recoupment of the expenditure as assessable income either at Other business income in the Income section of item P8 on your schedule or as part of your Income reconciliation adjustments in the Reconciliation items section of item P8. For further information, see the Guide to depreciating assets 2012 or phone 13 28 66.

    Water conservation and conveyance facilities

    You can claim a deduction for the decline in value of a water facility. A water facility includes plant or a structural improvement, or an alteration, addition or extension to plant or a structural improvement, that is primarily or principally for the purpose of conserving or conveying water. The expenditure must be incurred primarily and principally for conserving or conveying water for use in a primary production business on land in Australia.

    'Water facility' includes dams, tank stands, bores, wells, irrigation channels, pipes, pumps, water towers and windmills. Water facility also includes certain other expenditure incurred on or after 1 July 2004 for:

    • a repair of a capital nature to plant or a structural improvement that is primarily or principally for the purpose of conserving or conveying water - for example, if you purchase a pump that needs substantial work done to it before it can be used in your business, the cost of repairing the pump may be treated as a water facility
    • a structural improvement, or an alteration, addition or extension to a structural improvement that is reasonably incidental to conserving or conveying water
    • a repair of a capital nature to a structural improvement that is reasonably incidental to conserving or conveying water.

    Examples of structural improvements that are reasonably incidental to conserving or conveying water include a bridge over an irrigation channel, a culvert (a length of pipe or multiple pipes that are laid under a road to allow the flow of water in a channel to pass under the road), or a fence preventing livestock entering an irrigation channel.

    A deduction for the decline in value of a water facility can be claimed in equal instalments over three years.

    Unless you are an irrigation water provider, the expenditure must be incurred primarily and principally for conserving or conveying water for use in a primary production business you conduct on land in Australia. You may claim the deduction even when you do not own the land. Therefore, if you are a lessee carrying on a business of primary production on the land, you can still claim the deduction. Your deduction is reduced where the facility is not wholly used for either:

    • carrying on a primary production business on land in Australia, or
    • a taxable purpose - for example, producing assessable income.

    Irrigation water providers are entitled to a deduction for water facilities expenditure incurred on or after 1 July 2004. An irrigation water provider is an entity whose business is primarily and principally the supply of water to entities for use in primary production businesses on land in Australia. The supply of water by using a motor vehicle is excluded.

    If you are an irrigation water provider, you must incur the expenditure primarily and principally for the purpose of conserving or conveying water for use in primary production businesses conducted by other entities on land in Australia (being entities supplied with water by you). The deduction is reduced if the facility is not used wholly for a taxable purpose. Any recoupment of the expenditure may be assessable income. For more information, phone 13 28 66.

    If the expenditure incurred arose from a non-arm's length dealing and was more than the market value of what the expenditure was for, the amount of the expenditure is taken to be that market value instead.

    These deductions are not available to a partnership. Costs incurred by a partnership for facilities to conserve or convey water are allocated to each partner who can then claim the relevant deduction for their share of the expenditure.

    You may need to show any recoupment of the expenditure as assessable income either at Other business income in the Income section of item P8 on your schedule or as part of your Income reconciliation adjustments in the Reconciliation items section of item P8. For further information, see the Guideto depreciating assets 2012 or phone 13 28 66.

    Small business entities

    The amount you show at W must not include any amount relating to a depreciating asset used in your primary production business if you have chosen to claim a deduction for it under the small business entity depreciation rules.

    Completing this item

    Step 1   Write your total deductions for primary production landcare operations expenses and for water facilities at Landcare operations and business deduction for decline in value of water facility in the Primary production column, item P8 on page 3 of your schedule. Do not show cents.

    Step 2   Write your total deduction for non-primary production landcare operations expenses and water facilities at Landcare operations and business deduction for decline in value of water facility in the Non-primary production column. Do not show cents.

    Step 3   Add up your primary production and non-primary production deductions for landcare operations and water facilities and write the total at W.

    Income and expense reconciliation adjustments

    Do you need to make any income or expense reconciliation adjustments?

    No

    Go to Net income or loss from business this year.

    Yes

    Read on.

    You need to know

    You may need to make income reconciliation adjustments or expense reconciliation adjustments. These adjustments reconcile your business operating profit or loss with your business taxable income.

    Do not complete any income reconciliation adjustments or expense reconciliation adjustments if all the amounts you have written at CGross payments where Australian business number not quoted to W Landcare operations and business deduction for decline in value of water facility item P8 on your schedule are assessable income or allowable tax deductions for income tax purposes.

    If you have included amounts such as exempt income or non-deductible expenses or have not included amounts which are assessable income or expenditure that is deductible, you must work out your reconciliation adjustments.

    Worksheet 4 will assist you with your calculations.

    What are income reconciliation adjustments?

    Income reconciliation adjustments include:

    • income add backs - this is income not shown in the accounts which is assessable income for tax purposes, such as  
      • assessable balancing adjustment amounts on disposal of depreciating assets, and
      • other assessable income not included in the profit and loss statement
       
    • income subtractions - income shown in the accounts which is not assessable income, such as  
      • profit on sale of depreciating assets, and
      • other income that is not assessable for income tax purposes - for example, gross exempt income.
       

    Your income reconciliation adjustment is:

    your total income add backs - your total income subtractions

    Use Worksheet 4 to work out your income reconciliation adjustments for your primary and non-primary production businesses. The amount you write at XIncome reconciliation adjustments item P8 on your schedule is the total of your primary production and non-primary production income adjustments.

    If the amount is negative, print L in the box at the right of the amount.

    What are expense reconciliation adjustments?

    Expense reconciliation adjustments include:

    • expense add backs; expenses shown in the accounts which are not tax deductible, including timing deductions, such as  
      • prepaid expenses not deductible in this year
      • depreciation
      • loss on sale of a depreciating asset, and
      • other items not allowable as a deduction - for example, capital expenditure, additions to provisions and reserves, income tax expense, expenses relating to exempt income, debt deductions denied by the thin capitalisation rules, other non-deductible expenses (for further information, see Thin capitalisation, and PSI deductions)
       
    • expense subtractions; items not shown as expenses which are deductible for tax purposes, such as  
      • prepaid expenses deductible this year but not included elsewhere
      • deduction for decline in value of depreciating assets
      • deductible balancing adjustment amounts on disposal of depreciating assets, and
      • other items deductible for tax purposes.
       

    Your expense reconciliation adjustment is:

    your total expense add backs - your total expense subtractions

    Use Worksheet 4 to work out your expense reconciliation adjustments for your primary and non-primary production businesses. The amount you write at H Expense reconciliation adjustments item P8 on your schedule is the total of your primary production and non-primary production expense adjustments.

    If the amount is negative, print L in the box at the right of the amount.

    Specific reconciliation adjustments

    There are examples of specific reconciliation adjustments that may apply to you.

    If you were previously in the STS read Former STS taxpayers below first. Otherwise, go to Prepaid expenses.

    Former STS taxpayers

    Make adjustments in this section of item P8 on your schedule if you:

    • are eligible and have chosen to continue using the STS accounting method and the amounts you have shown at the Income and Expense sections of item P8 are not based on the STS accounting method, or
    • have stopped using the STS accounting method.

    These adjustments are explained in more detail below.

    Worksheet 4 will assist you with your calculations.

    Income derived but not received as at 30 June 2012 and expenses incurred but not paid as at 30 June 2012

    If you are eligible and have chosen to continue using the STS accounting method and have included at item P8 amounts of ordinary income that have been derived but not received in 2011-12, the amounts not received are not assessable this year - for example, trade debtors as at 30 June 2012.

    These amounts form part of your income reconciliation adjustments at X at P8 - include these amounts at (f) on Worksheet 4.

    If you are eligible and have chosen to continue using the STS accounting method and have included at item P8 amounts for general deductions, repairs and tax-related expenses that have been incurred but not paid in 2011-12, the amounts not paid are not deductible this year - for example, trade creditors as at 30 June 2012.

    These amounts form part of your expense reconciliation adjustments at H item P8 - include these amounts at (n) on Worksheet 4.

    Adjustments when ceasing to use the STS accounting method

    If you have discontinued using the STS accounting method read on.

    If you have not included any amount at Income at item P8, amounts of ordinary income that were derived but not received while using the STS accounting method, these amounts are assessable this year - for example, trade debtors as at 30 June 2011.

    Include these amounts at (b) on Worksheet 4.

    If you have not included any amount at Expenses at item P8, amounts of general deductions, repairs or tax-related expenses that were incurred but not paid while using the STS accounting method, these amounts are deductible this year - for example, trade creditors as at 30 June 2011.

    Include these amounts (other than tax-related expenses) at (t) on Worksheet 4. Write your deduction for tax-related expenses at item D10 on your tax return.

    Depreciating assets deducted under the simplified depreciation rules

    Disposal of depreciating assets

    If you disposed of any depreciating assets during the income year, the following amounts (if any) form part of your Income reconciliation adjustments at X item P8.

    • the taxable purpose proportion of the termination value of low-cost assets that have been disposed of, for which an immediate deduction has been claimed
    • if the closing pool balance of a small business pool is less than zero, the amount below zero, and
    • assessable balancing adjustment amounts on the disposal of depreciating assets not allocated to small business pools.

    See the Definitions box for an explanation of these terms.

    Include the amounts at (b) on Worksheet 4.

    Any deductible balancing adjustment amounts on the disposal of depreciating assets that you have not allocated to a small business pool form part of your Expense reconciliation adjustments at H item P8 - include these amounts at (q) on Worksheet 4.

    For more information on assessable balancing adjustment amounts and deductible balancing adjustment amounts, see the Guide to depreciating assets 2012.

    Prepaid expenses

    Special rules may affect the timing of deductions for prepaid expenditure. Under these rules you may need to apportion certain prepaid expenses over more than one income year. You must make an expense reconciliation adjustment to add back that part of the expense that is not deductible in the year it is incurred. Show the adjustment at (k) on Worksheet 4.

    If you had a prepaid expense in a prior year which is to be apportioned over the service period and you are entitled to a deduction for part of the expense this year but have not included it elsewhere, show the adjustment as an expense subtraction at (s) on Worksheet 4.

    For more information about the prepayment rules, see the publication Deductions for prepaid expenses 2012.

    Deduction for decline in value

    A deduction for a decline in value of a depreciating asset calculated under income tax law may differ from the accounting or book calculation of depreciation. Different rules regarding such things as effective life, the calculation of balancing adjustment amounts and the treatment of debt forgiveness amounts can produce a discrepancy between the two calculations.

    Under income tax law you can deduct an amount equal to the decline in value of a depreciating asset in 2011-12 if you held the depreciating asset for any time during the year and used it (or installed it ready for use) for a taxable purpose, such as for producing assessable income.

    The deduction is reduced to the extent you do not use the asset for a taxable purpose.

    To help you calculate your deduction for decline in value, see the Guide to depreciating assets 2012, which also provides explanations of relevant terms. The publication also explains the option to allocate to a low-value pool depreciating assets that cost less than $1,000 (excluding input tax credit entitlements) and depreciating assets that have an opening adjustable value of less than $1,000.

    If you choose to use the low-value pool method to calculate the decline in value of low-cost or low-value depreciating assets and the pool contains assets used for work-related, self-education or non-business rental purposes, read question D6 in Individual tax return instructions 2012. Do not include the deduction at item P8 on your schedule. If none of the depreciating assets in the pool is used for any of those purposes, include the amount of your low-value pool deduction at (r) on Worksheet 4. Where necessary, make a reasonable apportionment between primary production and non-primary production activities.

    You should also include the deduction for decline in value of depreciating assets not allocated to a pool at (r) on Worksheet 4.

    You should also add back the depreciation charged in your accounts and shown at M Depreciation expenses in the Expenses section of item P8 as an expense reconciliation adjustment - include the amount at (h) on Worksheet 4. The amount at (h) should not include any small business pool deductions which you have claimed at M.

    Luxury car leasing

    A leased car, either new or second-hand, is a luxury car if its cost exceeds the car limit that applies for the income year in which the lease commences. The car limit for 2011-12 is $57,466.

    A luxury car lease entered into after 7.30pm (by legal time in the ACT) on 20 August 1996 (other than genuine short-term hire arrangements) is treated as a notional sale-and-loan transaction.

    The cost or value of the car specified in the lease (or the market value if the parties were not dealing at arm's length in connection with the lease) is taken to be the cost of the car for the lessee and the amount loaned by the lessor to the lessee to buy the car.

    In relation to the notional loan, the actual lease payments are divided into notional principal and finance charge components. That part of the finance charge component for the notional loan applicable for the particular period (the accrual amount) is deductible to the lessee, subject to any reduction required under the thin capitalisation rules.

    The amount forms part of your expense reconciliation adjustments at H item P8 on your schedule - include the amount at (p) on Worksheet 4.

    In relation to the notional sale, the lessee is treated as the holder of the luxury car and may be entitled to claim a deduction for the decline in value of the car. If the lessee is a small business entity using the simplified depreciation rules for the income year in which the lease is entered into, the lessee allocates the car to their general small business pool.

    For the purpose of calculating the deduction, the cost of the car is limited to the car limit for the income year in which the lease is granted.

    For more information on deductions for the decline in value of leased luxury cars, see the Guide to depreciating assets 2012.

    In summary, the lessee is entitled to deductions equal to:

    • the accrual amount, and
    • the decline in value of the luxury car, based on the applicable car limit, unless the car is allocated to the general small business pool.

    You reduce both deductions to reflect any use of the car for a non-taxable purpose.

    Where you allocated the car to the general small business pool with the cost based on the applicable car limit, see Calculating your depreciation deductions.

    If you have included the lease expense at J Lease expenses in the Expenses section of item P8 in your schedule, the amount should also form part of your expense reconciliation adjustments at H item P8 - include the amount at (i) on Worksheet 4. Include the deduction for the accrual amount at (p).

    If the lease terminates or is not extended or renewed and the lessee does not actually acquire the car from the lessor, the lessee is treated under the rules as disposing of the car by way of sale to the lessor. This constitutes a balancing adjustment event. If the car is not subject to the simplified depreciation rules, any assessable or deductible balancing adjustment amount for the lessee must be determined. If the car has been allocated to the lessee's general small business pool, see calculation 5 for small business entities.

    Hire-purchase agreements

    Hire-purchase and instalment sale agreements of goods are treated as a sale of the property by the financier (or hire-purchase company) to the hirer (or instalment purchaser).

    The sale is treated as being financed by a loan from the financier to the hirer at a sale price of either their agreed cost or value or the property's arm's length value.

    The periodic hire-purchase (or instalment) payments are treated as payments of principal and interest under the notional loan. The interest component is deductible to the hirer, subject to any reduction required under the thin capitalisation rules. This amount forms part of the expense reconciliation adjustments at H item P8 on your schedule - include the amount at (t) on Worksheet 4.

    In relation to the notional sale, the hirer of a depreciating asset is treated as the holder of the asset and either allocates the asset to the appropriate small business pool if they are a small business entity using the simplified depreciation rules for the income year, or may be entitled to claim a deduction for the decline in value of the depreciating asset. The cost of the asset for this purpose is taken to be the agreed cost or value, or the arm's length value if the dealing is not at arm's length.

    If you have included hire-purchase charges as an expense at item P8 on your schedule, the amount should also form part of your expense reconciliation adjustments at H item P8 - include the amount at (n) on Worksheet 4.

    Termination of a limited recourse debt

    Excessive deductions for capital allowances are included in assessable income under the limited recourse debt rules contained in Division 243 of the ITAA 1997. This will occur where:

    • expenditure on property has been financed or re-financed wholly or partly by the limited recourse debt
    • the limited recourse debt is terminated after 27 February 1998 but has not been paid in full by the debtor, and
    • because the debt has not been paid in full, the capital allowance deductions allowed for the expenditure exceed the deductions that would be allowable if the unpaid amount of the debt was not counted as capital expenditure of the debtor. Special rules apply in working out whether the debt has been fully paid.

    A limited recourse debt is a debt where the rights of the creditor as against the debtor, in the event of default in payment of the debt or of interest, are limited wholly or predominantly to the property which has been financed by the debt or is security for the debt, or rights in relation to such property. A debt is also a limited recourse debt if, notwithstanding that there may be no specific conditions to that effect, it is reasonable to conclude that the creditor's rights as against the debtor's are capable of being so limited.

    A limited recourse debt includes a notional loan under a hire-purchase or instalment sale agreement of goods to which Division 240 of the ITAA 1997 applies - see section 243-20.

    The amount that is included within assessable income as a result of these provisions forms part of your income reconciliation adjustments at X item P8 on your schedule - include the amount at (b) on worksheet 4.

    Worksheet 4: Reconciliation statement

    Reconcile your primary production and non-primary production items separately.

    Income reconciliation adjustments

    Primary production

     

    Non-primary production

     

    Additions

    Assessable balancing adjustment amounts on disposal of depreciating assets

    $

     

    $

    (a)

    Assessable business income not included in the profit and loss statement

    $

     

    $

    (b)

    Subtotal: add (a) and (b).

    $

     

    $

    (c)

    Subtractions

    Net exempt income (gross exempt income less expenses relating to that exempt income)

    $

     

    $

    (d)

    Profit on sale of depreciating assets included in accounts

    $

     

    $

    (e)

    Other non-assessable income included in the profit and loss statement

    $

     

    $

    (f)

    Subtotal: add (d), (e) and (f).

    $

     

    $

    (g)

    Income reconciliation adjustments: take (g) away from (c).

    $

     

    $

     

    Expense reconciliation adjustments

    Primary production

     

    Non-primary production

     

    Additions

    Depreciation charged in accounts

    $

     

    $

    (h)

    Lease payments for luxury cars

    $

     

    $

    (i)

    Loss on sale of depreciating assets included in accounts

    $

     

    $

    (j)

    Part of prepaid expenses not deductible this year

    $

     

    $

    (k)

    Items not allowable as deductions:

     

     

     

     

    • capital expenditure

     

    $

     

    $

    (l)

    • additions to provisions and reserves

     

    $

     

    $

    (m)

    • Other non-deductible items, including income tax

     

    $

     

    $

    (n)

    Subtotal: add (h), (i), (j), (k), (l), (m) and (n).

    $

     

    $

    (o)

    Subtractions

    Accrual amount deduction for lessee of luxury cars

    $

     

    $

    (p)

    Deductible balancing adjustment amounts on disposal of depreciating assets

    $

     

    $

    (q)

    Deduction for decline in value of depreciating assets

    $

     

    $

    (r)

    Part of prepaid expenses deductible this year but not included elsewhere

    $

     

    $

    (s)

    Other items deductible for tax purposes not included in the profit and loss statement

    $

     

    $

    (t)

    Subtotal: add (p), (q), (r), (s) and (t).

    $

     

    $

    (u)

    Expense reconciliation adjustments: take (u) away from (o).

    $

     

    $

     

    Note 1

    Include amounts at (h) only if you are not using the simplified depreciation rules. However, exclude any pool deductions which you have included at M item P8 which relate to a continuing small business pool.

    Note 2

    See the Guide to depreciating assets 2012 for an explanation of depreciating assets.

    Note 3

    If you have included an amount of capital expenditure incurred to terminate a lease or licence at J Lease expenses item P8, make a reconciliation adjustment at H Expense reconciliation adjustments by including the amount of capital expenditure as an expense add back and taking away that part of the expense which is allowed as a tax deduction.

    Completing this item

    Step 1   Complete Worksheet 4 using the explanations provided. This will give you your total income and expense reconciliation amounts (primary and non-primary production) that you need for your schedule.

    Step 2   Transfer the totals in the yellow rows on the worksheet to the appropriate boxes on page 3 of your schedule. Do not show cents.

    Step 3  If any of the reconciliation adjustment amounts
    is negative, print L in the box at the right of the amount.

    Step 4   Add up your primary production and non-primary production income reconciliation adjustments and write the total at X.

    Step 5   Add up your primary production and non-primary production expense reconciliation adjustments and write the total at H.

    Step 6   If the total income reconciliation adjustment amount is negative, print L in the box at the right of the amount at X. If the total expense reconciliation adjustment amount is negative, print L in the box at the right of H.

    Do not include in the amount at (t) on worksheet 4:

    • environmental protection expenditure
    • section 40-880 deductions
    • business deductions for project pools
    • small business and general business tax break
    • deductions for landcare operations and water facilities.

    Reconciliation adjustments for these amounts are shown separately at V, A, L, F and W on your schedule.

    Worksheet 5: Working out your net income or loss from primary production business this year

    Write your primary production total business income shown in the Primary production column at TOTAL BUSINESS INCOME item P8.

    $

     

    (a)

    Write your primary production total business expenses shown at S item P8.

    $

     

    (b)

    Add up the amounts of any deductions for primary production environmental protection expenses, section 40-880 expenditure, project pool, small business and general business tax break and landcare operations and water facilities and write the total at (c).

    $

     

    (c)

    Add the amount at (b) to the amount at (c).

    $

     

    (d)

    Take the amount at (d) away from the amount at (a).

    $

     

    (e)

    Write your primary production income reconciliation adjustment (if any).

    $

     

    (f)

    Write your primary production expense reconciliation adjustment (if any).

    $

     

    (g)

    Your net income or loss from your primary production business: add (e), (f) and (g).

    $

     

    (h)

    If the amount at (d) is more than the amount at (a), the amount at (e) is a loss. If it is, or if you have a negative amount at (f) or (g), the examples below will help you to work out your loss from primary production business.

    Worksheet 6: Working out your net income or loss from non-primary production business this year

    Write your non-primary production total business income shown in the Non-primary production column at TOTAL BUSINESS INCOME item P8.

    $

     

    (i)

    Write your non-primary production total business expenses shown at T item P8.

    $

     

    (j)

    Add up the amounts of any deductions for non-primary production environmental protection expenses, section 40-880 expenditure, project pool, small business and general business tax break and landcare operations and write the total at (k).

    $

     

    (k)

    Add the amount at (j) to the amount at (k).

    $

     

    (l)

    Take away the amount at (l) from the amount at (i).

    $

     

    (m)

    Write your non-primary production income reconciliation adjustment (if any).

    $

     

    (n)

    Write your non-primary production expense reconciliation adjustment (if any).

    $

     

    (o)

    Your net income or loss from your non-primary production business: add (m), (n) and (o).

    $

     

    (p)

    If the amount at (l) is more than the amount at (i), the amount at (m) is a loss. If it is, or if you have a negative amount at (n) or (o), the examples below will help you to work out your loss from non-primary production business.

    Examples

    If the amount at (e) is a $5,000 loss, the amount at (f) is $12,000 income and the amount at (g) is a $1,000 loss, the net income from the primary production business at (h) is $6,000.

    If the amount at (e) is $5,000 profit, the amount at (f) is $2,000 income and the amount at (g) is an $8,000 loss, the loss from the primary production business at (h) is $1,000.

    If the amount at (m) is a $5,000 loss, the amount at (n) is a $4,000 loss and the amount at (o) is a $1,000 loss, the loss from the non-primary production business at (p) is $10,000.

    End of example
    Net income or loss from business this year

    Use worksheet 5 and worksheet 6 to work out your net income or loss from your primary and non-primary production businesses this year, not including any non-commercial business losses deferred from a prior year.

    Completing this item

    Step 1   Transfer the amount at (h) on worksheet 5 to B item P8 on page 3 of your schedule. Do not show cents. If the amount is a loss, print L in the box at the right of this amount.

    Step 2   Transfer the amount at (p) on worksheet 6 to C item P8 on page 3 of your schedule. Do not show cents. If the amount is a loss, print L in the box at the right of this amount.

    Step 3   Add B and C and write the total in the adjacent Totals column. The amount shown should not include any non-commercial business losses deferred from a prior year (which are shown at D or E - see Deferred non-commercial business losses from a prior year).

    If you made a loss from your business, print L in the box at the right of this amount.

    If the amount at B or C includes details from more than one business activity, and any one of these activities resulted in a net loss, you also need to complete items P3 and P9 on your schedule.

    Deferred non-commercial business losses from a prior year

    Do you have any deferred non-commercial business losses from a prior year?

    No

    Go to Net income or loss from business this year.

    Yes

    Read on.

    You need to know

    A deferred non-commercial business loss is a loss you incurred in a prior year which you were unable to claim against other income. If your activity is carried on partly in Australia and partly overseas please phone 13 28 66 or see the fact sheet Non-commercial losses: deferral of losses under the heading Foreign business losses.

    The non-commercial business loss may be reduced if you:

    • earned net exempt income in this income year, or
    • became bankrupt or were released from any debts by the operation of an Act relating to bankruptcy.

    For more information, phone 13 28 66.

    Completing this item

    Step 1   At D item P8 on page 3 of your schedule write the amount of any primary production losses you deferred in a prior year from activities that are the same or similar to your current year activity. Do not show cents.

    Step 2   At E write the amount of any non-primary production losses you deferred in a prior year from activities that are the same or similar to your current year activity. Do not show cents.

    Step 3   Add up your primary and non-primary production deferred non-commercial business losses. Write the total at Deferred non-commercial business losses from a prior year in the Totals column.

    Net income or loss from business

    This amount takes into account non-commercial losses deferred from a prior year.

    Completing this item

    Step 1   If you have net income from primary production business this year at B, take away from it the amount of your deferred non-commercial primary production business losses from a prior year shown at D. Write the answer at Y Net income or loss from business item P8 on page 3 of your schedule.

    If the amount at Y is negative, print L in the box at the right of the amount.

    If you have a loss from primary production business this year at B, add it to the amount of your deferred non-commercial primary production business losses from a prior year shown at D. Write the total at Y Net income or loss from business item P8 on your schedule and print L in the box at the right of the amount.

    If you have printed L in the box at the right of the amount at Y, you also need to complete items P3 and P9 on your schedule.

    Step 2   If you have net income from non-primary production business this year at C, take away from it the amount of your deferred non-commercial non-primary production business losses from a prior year shown at E. Write the answer at Z Net income or loss from business item P8 on page 3 of your schedule.

    If the amount at Z is negative, print L in the box at the right of the amount.

    If you have a loss from non-primary production business this year at C, add it to the amount of your deferred non-commercial non-primary production business losses from a prior year shown at E. Write the total at Z Net income or loss from business item P8 on your schedule and print L in the box at the right of the amount.

    If you have printed L in the box at the right of the amount at Z, you also need to complete items P3 and P9 on your schedule.

    Step 3   Add up the amounts shown at Y and Z.

    Write the answer at Net income or loss from business in the Totals column. If the total is negative, print L in the box at the right of the amount.

    Step 4   Transfer the amounts at Y and Z on your schedule to B and C (respectively) item 15 on your tax return (supplementary section).

    Last modified: 04 Mar 2016QC 25649