Carrying on a business incurring deductible non-business expenditure

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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 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.
   

See also:

• Investments in tax shelter arrangements