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Descriptions on excluded entity, residential rental property, plant and examples.

Last updated 27 June 2018

Excluded entity

An entity is an excluded entity if, at any time during the income year in which the travel expense is incurred, the entity is:

  • a corporate tax entity
  • a superannuation plan that is not a self-managed superannuation fund
  • a public unit trust
  • a managed investment trust, or
  • a unit trust or a partnership, if each of its members are entities of a type listed above at that time during the income year.

Residential rental property

Residential rental property is a residential premises used to provide residential accommodation for the purpose of producing assessable income.

A residential premise (property) is land or a building that is:

  • occupied as a residence or for residential accommodation
  • intended to be occupied, and is capable of being occupied, as a residence or for residential accommodation.

For example, a house or a unit used as residential accommodation for the purpose of producing rental income is residential rental property. A caravan or a house-boat is generally not residential rental property


The ordinary meaning of plant does not include the setting for income-earning activities. Residential rental properties will invariably be the setting for income-producing activities and so do not fall within the ordinary meaning of plant. Items that form part of the premises are also part of the setting, and therefore not eligible for deductions for their decline in value.

You should consider the following factors when determining whether an item is part of the premises or setting:

  • whether the item appears visually to retain a separate identity
  • the degree of permanence with which it is attached to the premises
  • the incompleteness of the structure without it
  • the extent to which it was intended to be permanent or whether it was likely to be replaced within a relatively short period.

None of these factors alone is determinative and they must all be considered together.


Wall and floor tiles are generally fixed to the premises, not freestanding, and intended to remain in place for a substantial period of time. They will generally form part of the premises. Expenditure on these items falls under capital works.

On the other hand, a freestanding item such as a bookcase may be attached to the structure only for temporary stability. It therefore does not form part of the premises and may qualify for a deduction for decline in value.

Kitchens are fixed to the premises, are intended to remain in place indefinitely and are necessary to complete the premises. Any separate visual identity they have is outweighed by the other factors. They are therefore part of the premises. Clothes hoists are also part of the premises for similar reasons.

Insulation batts, although generally not fixed, are intended to remain in place indefinitely, do not have a separate visual identity and add to the completeness of the structure. They are also part of the premises.

In addition to its ordinary meaning, plant includes articles and machinery.