INCOME TAX ASSESSMENT ACT 1997
This section prevents some expenditure from forming part of the *cost base, or of an element of the cost base, of a *CGT asset *acquired after 7.30 pm, by legal time in the Australian Capital Territory, on 13 May 1997. (The expenditure mentioned in this section can include giving property: see section 103-5.)
For the cost base of interests in partnership assets acquired after that time, see section 110-50.
For exceptions to the application of this section, see section 110-53.
This section also applies to expenditure incurred after 30 June 1999 on land or a building if:
(a) the land or building was *acquired at or before the time mentioned in subsection (1); and
(b) the expenditure forms part of the fourth element of the *cost base of the land or building.
Expenditure does not form part of the second or third element of the cost base to the extent that you have deducted or can deduct it.
Expenditure (except expenditure excluded by subsection (1B)) does not form part of the cost base to the extent that you have deducted or can deduct it for an income year, except so far as:
(a) the deduction has been reversed by an amount being included in your assessable income for an income year by a provision of this Act (outside this Part and Part 3-3 and Division 243); or
(ab) the deduction is under Division 243; or
(b) the deduction would have been so reversed apart from a provision listed in the table (relief from including a balancing charge in your assessable income).
|Provisions for relief from including a balancing charge in your assessable income|
|1||section 40-340||Roll-over relief for *depreciating asset|
|2||section 40-365||Involuntary disposal of *depreciating asset|
|3||(Repealed by No 93 of 2011)|
Expenditure does not form part of any element of the cost base to the extent of any amount you have received as *recoupment of it, except so far as the amount is included in your assessable income.
(Repealed by No 95 of 2004)
The cost base is reduced to the extent that you have deducted or can deduct for an income year capital expenditure incurred by another entity in respect of the *CGT asset. (This rule does not apply so far as the deduction is covered by paragraph (2)(a) or (b).)
Example:Landcare and water facility expenditure giving rise to a tax offset 110-45(5)
Under Division 43 you can deduct expenditure incurred by a previous owner of capital works you own.
Expenditure does not form part of the cost base to the extent that you choose a *tax offset for it under the former section 388-55 (about the landcare and water facility tax offset) instead of deducting it.
Expenditure does not form part of the cost base to the extent that:
(a) it is eligible heritage conservation expenditure (as determined under former section 159UO of the Income Tax Assessment Act 1936); and
(b) you could have deducted it for an income year under any of these Divisions (about capital works):
(i) Division 43 of this Act;
but for the exclusions in paragraph 43-70(2)(h) of this Act and former subsections 124ZB(4) and 124ZG(5) of that Act.
(ii) former Division 10C or 10D of Part III of that Act;
Because eligible heritage conservation expenditure is the subject of a tax offset, it is also not deductible.