• Summary of rules including the 12-month rule

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    • Prepaid 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 chapter 2.
    • If you are an individual, your prepaid non-business expenditure is immediately deductible under the 12-month rule where:
      • the eligible service period for the expenditure is 12 months or less
      • the 12-month period ends no later than the last day of the income year following the year in which the payment was incurred.
       
    • If you are an individual, your deduction for prepaid non-business expenditure is apportioned over the eligible service period or 10 years, whichever is less, where the eligible service period is more than 12 months or it ends after the last day of the next income year.
    Last modified: 18 Jun 2002QC 27429