Chapter 7 - Taxpayers, other than individuals and STS taxpayers, incurring deductible non-business expenditure

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

If you are an individual taxpayer, see chapter 4.

If you are an STS taxpayer, see chapter 5.

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

• 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.
• 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.