Capital expenditure deductible under the UCA

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The UCA maintains the treatment of some capital expenditure and also introduces new deductions for some capital expenditure that did not previously attract a deduction. Most of these deductions are only available if the expenditure does not form part of the cost of a depreciating asset.

The following types of capital expenditure are deductible under the UCA:

• landcare operations, electricity connections or telephone lines incurred by primary producers and other landholders see Capital expenditure of primary producers and other landholders
• environmental protection activities see Environmental protection activities
• exploration and prospecting see Mining and quarrying and minerals transport
• rehabilitation of mining and quarrying sites see Mining and quarrying and minerals transport
• petroleum resource rent tax see Mining and quarrying and minerals transport
• certain capital expenditure directly connected with a project see Project pools
• certain business related costs see Business related costs-section 40-880 deductions.

Generally, to work out your deductions you need to reduce the expenditure by the amount of any GST input tax credits you are entitled to claim in relation to the expenditure. Increasing or decreasing adjustments that relate to the expenditure may be allowed as a deduction or included in assessable income, respectively. Special rules apply to input tax credits on expenditure allocated to a project pool see Project pools.

STS taxpayers (except primary producers) may deduct capital expenditure under these UCA rules only if the expenditure is not part of the cost of a depreciating asset. Primary producers who are STS taxpayers can choose to deduct certain depreciating assets under the UCA rules see STS taxpayers.