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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.

QC27594