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  • Calculating your deduction where the 12-month rule is satisfied



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

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    Example: Prepaid expense that is immediately deductible

    The ABC Trust is an STS taxpayer. On 1 June 2002, it made a payment of $24,000 to cover the lease of its business premises for a 12-month period commencing on 1 July 2002 and ending on 30 June 2003.

    As the eligible service period for the expenditure does not exceed 12 months and ends on or before the last day of the income year following the year in which the payment was made the prepayment satisfies the 12-month rule. The ABC Trust can therefore claim an immediate deduction of $24,000 in the 2001-02 income year.

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    Last modified: 10 Dec 2019QC 27429