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  • Calculating your deduction where the 12-month rule is not satisfied

    Attention

    Warning:

    This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

    End of attention

    Where you incur non-business expenditure and the eligible service period is more than 12 months or it ends after the last day of the next income year, you must use the following formula to work out your deduction:

    A × (B ÷ C)

    Where:

    A is expenditure

    B is number of days of eligible service period in the income year

    C is total number of days of eligible service period

    Example: Deduction for non-business expenditure with an eligible service period of more than 12 months

    On 1 January 2002, Martin, a senior clerk employed by a legal firm, paid $1,250 subscription for the monthly provision of a professional journal to cover the period 1 January 2002 to 31 January 2003. As the eligible service period is more than 12 months, Martin must apportion his deduction over the 2002 and 2003 income years. Martin's deductions are:

    2001-02

    $1,250 × (181 ÷ 396) (1 January 2002 to 30 June 2002) = $571)

    2002-03

    $1,250 × (215 ÷ 396) (1 July 2002 to 31 January 2003) = $679

    Over the 2002 and 2003 income years, Martin will get a total deduction of $1,250.

    End of example
    Last modified: 10 Dec 2019QC 27429