ATO Interpretative Decision

ATO ID 2003/821

Income Tax

Capital Allowances: bowling greens constructed from synthetic or artificial materials
FOI status: may be released

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

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Issue

Can a taxpayer deduct an amount under Division 43 of the Income Tax Assessment Act 1997 (ITAA 1997) for capital expenditure incurred in the construction of a bowling green from synthetic or artificial materials?

Decision

Yes. The taxpayer can deduct an amount under Division 43 of the ITAA 1997 for capital expenditure incurred in the construction of a bowling green from synthetic or artificial materials.

Facts

The taxpayer is a sporting club and constructed a bowling green from synthetic or artificial materials.

Reasons for Decision

In order to deduct an amount for the bowling green constructed from synthetic or artificial materials under Division 43 of the ITAA 1997, the bowling green must first be a capital work to which Division 43 of the ITAA 1997 applies.

Subsection 43-20(2) of the ITAA 1997 provides that Division 43 of the ITAA 1997 applies to capital works being structural improvements begun after 26 February 1992.

Subsection 43-20(3) of the ITAA 1997 gives some examples of those structural improvements. In particular, paragraph 43-20(3)(a) of the ITAA 1997 lists sealed roads, sealed driveways, sealed car parks, sealed airport runways, bridges, pipelines, lined road tunnels, retaining walls, fences, concrete or rock dams and artificial sports fields as examples of structural improvements.

Further, subsection 43-20(4) of the ITAA 1997 provides that Division 43 of the ITAA 1997 does not apply to certain structural improvements. In particular, paragraph 43-20(4)(b) of the ITAA 1997 excludes structural improvements being earthworks that merely create artificial landscapes, for example, grass golf course fairways and greens, gardens, and grass sports fields.

Therefore, a bowling green constructed from synthetic or artificial materials would be a structural improvement under paragraph 43-20(3)(a) of the ITAA 1997 and would not be excluded under paragraph 43-20(4)(b) of the ITAA 1997. As such, a bowling green constructed from synthetic or artificial materials is a capital work to which Division 43 of the ITAA 1997 applies. Consequently, an amount can be deducted under Division 43 of the ITAA 1997 for this type of bowling green.

Amendment History

Date of Amendment	Part	Comment
26 May 2017	Legislative References	Add "paragraph 43-20(3)(a)" and "paragraph 43-20(4)(b)"under Income Tax Assessment Act 1997. Delete "section 43-20" under Income Tax Assessment Act 1997.

Date of decision: 25 August 2003

Year of income: Year ended 30 June 2003

Legislative References:
Income Tax Assessment Act 1997
   Division 43
   subsection 43-20(2)
   subsection 43-20(3)
   paragraph 43-20(3)(a)
   subsection 43-20(4)
   paragraph 43-20(4)(b)

Related ATO Interpretative Decisions
ATO ID 2003/820

Keywords
Construction expenditure area
Uniform capital allowances system

Siebel/TDMS Reference Number: 3518192, 1-BC0DQDI

Business Line: Private Groups and High Wealth Individuals

Date of publication: 12 September 2003
Date reviewed: 9 May 2017

ISSN: 1445-2782

history

	Date:	Version:
	25 August 2003	Original statement
You are here	26 May 2017	Updated statement

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