If you are an individual taxpayer, see Individual taxpayers incurring deductible non-business expenditure.
If you are a small business entity or would be a small business entity if the aggregated turnover threshold was $50 million, see Small business entities.
Non-business expenditure is any expense you incur in an activity that will earn assessable income that does 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 a small business entity or an entity that would be a small business entity if the aggregated turnover threshold was $50 million, 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 Investments in tax shelter arrangements.