ATO Interpretative Decision
ATO ID 2001/92
Income Tax
Depreciation: Rental Property (Plant or Articles)FOI status: may be released
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This ATOID provides you with the following level of protection:
If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.
Issue
Whether particular items in a rental property are 'plant ' for the purposes of depreciation under section 42-15 (Income Tax Assessment Act 1997 (ITAA 19))?
Decision
No. None of the items (listed below) are 'plant' for the purposes of section 42-15 (ITAA 1997).
Facts
The taxpayer claims depreciation on certain items on the basis that the items are 'plant' for depreciation purposes (section 42-15 ITAA 1997). The items at issue are;
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- Mirrored sliding doors (which form part of a built in wardrobe);
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- Vanity unit (which holds a basin and is attached to a wall);
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- Removable kitchen cupboard doors;
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- Tiling in apartment;
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- Tap ware;
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- Towel rails, soap holder, toilet roll holders and robe hooks;
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- Facade (common area); Flyscreens attached to all opening windows;
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- Flyscreen door for balcony sliding door;
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- Frameless toughened glass screen on balcony separating apartments
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- Tiling (common area); and
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- Mirrors/Shower screens (common area).
Reasons For Decision
None of the items are 'plant ' for the purposes of section 42-15 (ITAA 1997), however, all the items form part of the 'fabric of the building', as they are an integral part of the structure of the building (see Case 11/97 97 ATC 173; Case 11655 (1997) 35 ATR 1022; Imperial Chemical Industries of Australia and New Zealand Ltd v FC of T (1970) 120 CLR 396; Case Y52 91 ATC 460; Case 7380 (1991) 22 ATR 3446; Case V144 88 ATC 906; Case 4609 (1988) 19 ATR 3880; Wangaratta Woollen Mills Ltd v FC of T 69 ATC 4095; (1969) 119 CLR 1);
On this basis, the items are not depreciable under section 42-15 (ITAA 1997).
Date of decision: 4 August 1998
Legislative References:
Income Tax Assessment Act 1997
section 42-15
Case References:
Case 11/97
97 ATC 173
(1997) 35 ATR 1022 Imperial Chemicals of Australia and New Zealand Limited v FC of T
(1970) 120 CLR 396
70 ATC 4024
(1970) 1 ATR 450 Case Y52
91 ATC 460 Case 7,380
(1991) 22 ATR 3446 Case V144
88 ATC 906 Case 4,609
(1988) 19 ATR 3880 Wangaratta Woollen Mills Ltd v FC of T
69 ATC 4095
(1969) 1 ATR 329
(1969) 119 CLR 1
Keywords
Building depreciation
Depreciable plant and articles
Rental property
ISSN: 1445-2782
| Date: | Version: | |
| You are here | 4 August 1998 | Original statement |
| 9 June 2006 | Archived |