Income Tax Assessment Act 1997

CHAPTER 2 - LIABILITY RULES OF GENERAL APPLICATION  

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

Division 40 - Capital allowances  

Subdivision 40-G - Capital expenditure of primary producers and other landholders  

Operative provisions

SECTION 40-645   Electricity and telephone lines  

40-645(1)  
You can deduct amounts for capital expenditure you incur on * connecting power to land or upgrading the connection if, when you incur the expenditure:


(a) you have an interest in the land or are a share-farmer carrying on a * business on the land; and


(b) you or another entity intends to use some or all of the electricity to be supplied as a result of the expenditure in carrying on a business on the land for a * taxable purpose at a time when you have an interest in the land or are a share-farmer carrying on a business on the land.

40-645(2)  
You can also deduct amounts for capital expenditure you incur on a telephone line on or extending to land if, when you incurred the expenditure:


(a) a * primary production business was carried on the land; and


(b) you had an interest in the land or you were a share-farmer carrying on a primary production business on the land.

40-645(3)  
The amount you can deduct is 10% of the expenditure:


(a) for the income year in which you incur it; and


(b) for each of the next 9 income years.

Note 1:

Various provisions may reduce the amount you can deduct or stop you deducting. For example, see:

  • · Division 26 (limiting deductions generally); and
  • · section 40-650 (specifying expenditure you cannot deduct under this Subdivision); and
  • · Division 245 (which may affect your entitlement to a deduction if your debts are forgiven).
  • Note 2:

    If you recoup an amount of the expenditure, the amount will be included in your assessable income. See Subdivision 20-A .


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