INCOME TAX ASSESSMENT ACT 1997

CHAPTER 2 - LIABILITY RULES OF GENERAL APPLICATION  

PART 2-10 - CAPITAL ALLOWANCES: RULES ABOUT DEDUCTIBILITY OF CAPITAL EXPENDITURE  

Division 43 - Deductions for capital works  

Subdivision 43-F - Calculation of deduction  

Operative provisions

SECTION 43-215   Deduction for capital works begun before 27 February 1992  


Step 1

Calculate the amount worked out using the formula:


Your CE × Days used × Applicable rate
365

where:

your CE is *your construction expenditure.

days used is the number of days in the income year that you owned or were the lessee of *your area and used it in the way that applies to the capital works under Table 43-140 (Current year use).

applicable rate is:

  • (a) 0.04 if the capital works began after 21 August 1984 and before 16 September 1987; or
  • (b) 0.025 in any other case.

  • Step 2

    This step applies only to *hotel buildings and *apartment buildings. Reduce the Step 1 amount by the extent to which:

  • (a) for a hotel building - any part of *your area was not used wholly or mainly to operate a hotel, motel or guest house; or
  • (b) for an apartment building - any part of *your area was not used wholly for or in association with providing short-term accommodation for travellers.

  • Step 3

    Reduce the Step 1 or 2 amount by the extent to which:

  • (a) for a *hotel building or *apartment building - *your area was used only partly for the *purpose of producing assessable income; or
  • (b) for any other capital works - *your area was used only partly for the *purpose of producing assessable income or conducting *R&D activities.

  • Step 4

    The amount of your deduction is the lesser of your Step 3 amount or the *undeducted construction expenditure for *your area.


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