ATO Interpretative Decision
ATO ID 2002/567 (Withdrawn)
Income Tax
Capital write-off for painting newly acquired rental propertyFOI status: may be released
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This ATO ID is withdrawn from 5 September 2003 and replaced by ATO ID 2003/795This document incorporates revisions made since original publication. View its history and amending notices, if applicable.
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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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
Is the taxpayer allowed a deduction for capital write-off, for costs incurred in painting a newly acquired rental property, under Division 43 of the Income Tax Assessment Act 1997 (ITAA 1997)?
Decision
No. The taxpayer is not allowed a deduction for a capital write-off, for costs incurred in painting a newly acquired rental property, under Division 43 of the ITAA 1997.
Facts
The taxpayer purchased a rental property which required internal painting at the time of purchase. After settlement, but before the first tenant moved in, the taxpayer had the property repainted.
Reasons for Decision
Section 43-20 of the ITAA 1997 contains a list of capital works that are eligible for capital write-off. The list includes alterations or improvements.
Where an item which has an existing painted finish is repainted, this is not regarded as constituting an alteration or structural improvement. Painting in this instance has the purpose of remedying defects in the existing paintwork. Therefore, the cost of painting would not be included in the list of capital works write offs under the provisions of Division 43 of the ITAA 1997.
Date of decision: 5 March 2002Year of income: Year ending 30 June 2002
Legislative References:
Income Tax Assessment Act 1997
Division 43
Related Public Rulings (including Determinations)
Taxation Ruling TR 97/23
Keywords
Deductions & expenses
Structural improvement expenses
Initial repair expenses
ISSN: 1445-2782
| Date: | Version: | |
| 5 March 2002 | Original statement | |
| You are here | 5 September 2003 | Archived |