Tax Laws Amendment (2006 Measures No. 1) Act 2006 (32 of 2006)

Schedule 2   Business related costs

Part 1   Capital allowances amendments

Income Tax Assessment Act 1997

3   Section 35-5

Repeal the section, substitute:

35-5 Object

(1) The object of this Division is to improve the integrity of the taxation system by:

(a) preventing losses from non-commercial activities that are *carried on as *businesses by individuals (alone or in partnership) being offset against other assessable income; and

(b) preventing pre-business capital expenditure and post-business capital expenditure by individuals (alone or in partnership) in relation to non-commercial activities being deductible under section 40-880 (business related costs);

unless certain exceptions apply.

(2) This Division is not intended to apply to activities that do not constitute *carrying on a *business (for example, the receipt of income from passive investments).