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Chapter 7 Taxpayers incurring deductible non-business expenditure - not individual or STS taxpayers

Last updated 15 March 2020

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, there may be occasions when you incur deductible non-business expenditure - for example, if you incur expenditure for 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 tax shelter arrangements.

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