ATO Interpretative Decision

ATO ID 2002/68 (Withdrawn)

Income Tax

Depreciation: Outdoor Television Antenna
FOI status: may be released

'This ATO ID is withdrawn from the database because it contains a view in respect of a provision of the Income Tax Assessment Act 1997 that was repealed with effect from 1 July 2001. Despite its withdrawal from the database, this ATO ID continues to be a precedential view in respect of decisions relating to the former provision.
The current ATO view on this issue is contained in Rental Properties (NAT 1729).'

This document incorporates revisions made since original publication. View its history and amending notices, if applicable.

CAUTION: This is an edited and summarised record of a Tax Office decision. This record is not published as a form of advice. It is being made available for your inspection to meet FOI requirements, because it may be used by an officer in making another decision.

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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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 a depreciation deduction available under section 42-15 of the Income Tax Assessment Act 1997 (ITAA 1997) for an outdoor television antenna attached to a rental property?

Decision

No, a depreciation deduction is not available under section 42-15 of the ITAA 1997 because an outdoor television antenna attached to a rental property is not considered to be a unit of plant.

Facts

The television antenna is attached to a property that is available for rent at all times. It is clamped around a mast which is screwed onto the side of the building.

An outdoor television antenna is generally covered under a building rather than a contents insurance policy.

Reasons for Decision

Section 42-15 of ITAA 1997 states that you can deduct for an income year an amount for the depreciation of a unit of plant that you own and use to produce assessable income or is installed ready to use for that purpose.

Plant is defined in section 42-18 of the ITAA 1997 to include articles and machinery. The television antenna is not considered to be an article or machinery. Its nature and degree of affixation to the building and its treatment for insurance purposes, supports the view that it is not an article. On a functional analysis, it could not be said that its operation is sufficiently mechanical in nature for it to be accepted as machinery.

A primary factor in determining whether a particular item is a unit of plant is its function. Mahoney J. in Macquarie Worsteds Pty Ltd v. FC of T 74 ATC 4121 at 4125; (1974) 4 ATR 334 at 338 said: "To be plant, a thing of the kind here in question must be more than mere setting for the taxpayer's operations".

It is considered that the antenna provides no more than the setting or environment within which income-producing activities are conducted. A deduction under Division 43 of the ITAA 1997 for capital works expenditure is however, available at the rate of 2.5%.

Date of decision: 30 November 2001

Year of income: Year ended 30 June 2000 Year ended 30 June 2001

Legislative References:
Income Tax Assessment Act 1997
   Section 42-15
   Section 42-18
   Division 43

Case References:
Macquarie Worsteds Pty Ltd v. FC of T
74 ATC 4121
(1974) 4 ATR 334

Other References:
Guide to Depreciation

Keywords
Depreciation deduction
Unit of depreciation plant

Business Line: Capital Allowances (CoE)

Date of publication: 24 January 2002

ISSN: 1445-2782

history

	Date:	Version:
	30 November 2001	Original statement
You are here	9 June 2006	Archived

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