ATO Interpretative Decision

ATO ID 2004/256 (Withdrawn)

Income Tax

Capital Allowances: software development pools - in-house software
FOI status: may be released

This ATO ID is withdrawn as the issue is dealt with in the Guide to depreciating assets (NAT 1996).

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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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

Can a reasonable estimate of the value of the time spent by an individual taxpayer in developing in-house software constitute 'expenditure' the taxpayer may choose to allocate to a software development pool under subsection 40-450(1) of the Income Tax Assessment Act 1997 (ITAA 1997)?

Decision

No. The value of the taxpayer's time spent in developing computer software is not an amount of 'expenditure' and it cannot be allocated to a software development pool.

Facts

The taxpayer, an individual, did not incur any expenditure but spent many hours in developing in-house software. The taxpayer valued the time they took to develop the in-house software for the purpose of allocating that value to a software development pool and claiming a deduction in relation to the amount under section 40-455 of the ITAA 1997.

Reasons for Decision

The value of the time taken by a taxpayer to develop computer software is not an amount of expenditure and cannot be allocated to a software development pool.

Date of decision: 26 November 2003

Year of income: Year ended 30 June 2002

Legislative References:
Income Tax Assessment Act 1997
subsection 40-450(1)
section 40-455

Related ATO Interpretative Decisions
ATO ID 2004/255

Keywords
Capital Allowances CoE
In-house software
Uniform capital allowance system

Business Line: Effective Life and Capital Allowances Centre of Expertise

Date of publication: 26 March 2004

ISSN: 1445-2782

history

	Date:	Version:
	26 November 2003	Original statement
You are here	15 September 2006	Archived

Copyright notice

You are free to copy, adapt, modify, transmit and distribute material on this website as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).