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Chapter 8 Taxpayers incurring deductible non-business expenditure - not individual or STS taxpayers

Last updated 9 December 2019

Non-business expenditure

Non-business expenditure is any expenditure you incur in gaining assessable income from activities that do not amount to a business. For an entity carrying on a business, circumstances can arise where you may incur deductible non-business expenditure. A common example is expenditure made in respect of a rental property held as a passive investment.

Summary of rules

  • Prepaid non-business expenditure that is subject to the tax shelter rules is apportioned over the eligible service period or 10 years, whichever is less. For more information, see chapter 2.
  • If you are not an individual or an STS taxpayer, your deduction for prepaid non-business expenditure is apportioned over the eligible service period or 10 years, whichever is less. However, where the eligible service period ends not more than 13 months after you incur the expenditure, transitional rules may apply to allow part of the expenditure that would otherwise be deductible in a future year to be deductible in the expenditure year.

QC27429