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-F - Primary production depreciating assets  

Operative provisions

SECTION 40-545   How you work out the decline in value for horticultural plants  

40-545(1)  
The decline in value of a * horticultural plant for the income year in which it starts to decline in value is all of the capital expenditure attributable to the establishment of the plant if its * effective life is less than 3 years.

40-545(2)  
You work out the decline in value for an income year of a * horticultural plant whose * effective life is 3 years or more in this way:


Establishment
expenditure
× Write-off days in income year
365
× Write-off rate

where:

establishment expenditure is the amount of capital expenditure incurred that is attributable to the establishment of the * horticultural plant.

write-off days in income year is the number of days in the income year on which you satisfied a condition in subsection 40-525(2) for the plant and either used it for * commercial horticulture or held it ready for that use.

write-off rate is the rate shown in this table for the * horticultural plant according to its * effective life.


Write-off rate for horticultural plant
Item Effective life of: The write-off rate is:
1 3 to fewer than 5 years 40%
.
2 5 to fewer than 6 2/3 years 27%
.
3 6 2/3 to fewer than 10 years 20%
.
4 10 to fewer than 13 years 17%
.
5 13 to fewer than 30 years 13%
.
6 30 years or more 7%

Limit on write-off days

40-545(3)  
Disregard your use of the * horticultural plant on a day outside the period that:


(a) starts when the plant can first be used for * commercial horticulture; and


(b) extends for the time shown in this table (depending on the plant's * effective life).


Period after which you cannot count use of horticultural plant
Item Effective life: Time limit:
1 3 to fewer than 5 years 2 years and 183 days
.
2 5 to fewer than 6 2/3 years 3 years and 257 days
.
3 6 2/3 to fewer than 10 years 5 years
.
4 10 to fewer than 13 years 5 years and 323 days
.
5 13 to fewer than 30 years 7 years and 253 days
.
6 30 years or more 14 years and 105 days


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