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Edited version of private ruling
Authorisation Number: 1011489471551
This edited version of your ruling will be published in the public Register of private binding rulings after 28 days from the issue date of the ruling. The attached private rulings fact sheet has more information.
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Ruling
Subject: Depreciating assets and capital works
The ruling was provided to a tax exempt entity. Under the arrangement the subject of the Ruling, that entity will become a subsidiary member of a tax consolidated group, and at that time will no longer be a tax exempt entity. The entity leases land, depreciating assets and capital works to carry out its operations.
Question 1
The ruling concerned whether the entity holds, under item 2 of the table in section 40-40 of the Income Tax Assessment Act 1997 (ITAA 1997), certain depreciating assets fixed to land it leases.
Answer 1
The Commissioner ruled that the entity holds the depreciating assets under item 2 of the table in section 40-40 of the ITAA 1997.
Question 2
The ruling concerned whether the expenditure attributable to the cost of certain depreciating assets is excluded from being construction expenditure for the purposes of Division 43 of the ITAA 1997 by reason of paragraph 43-70(2)(e) of the ITAA 1997 because it is expenditure on plant for the purposes of that paragraph.
Answer 2
The Commissioner ruled that the expenditure attributable to certain depreciating assets is expenditure on 'plant'. Accordingly, that expenditure is excluded from being construction expenditure for the purposes of Division 43 of the ITAA 1997 by paragraph 43-70(2)(e) of the ITAA 1997.
Question 3
The ruling concerned whether the entity holds, under item 2 of the table in section 40-40 of the ITAA 1997, certain depreciating assets fixed to land it leases.
Answer 3
The Commissioner ruled that the entity holds the depreciating assets under item 2 of the table in section 40-40 of the ITAA 1997.
Question 4
The ruling concerned whether the entity holds, under item 10 of section 40-40 of the ITAA 1997, certain depreciating assets the entity legally owns.
Answer 4
The Commissioner ruled that the entity holds the depreciating assets under item 10 of the table in section 40-40 of the ITAA 1997.
Question 5
The ruling concerned whether, when the entity becomes a subsidiary member of a tax consolidated group, Division 58 of the ITAA 1997 will apply such that subsection 705-47(2) of the ITAA 1997 will operate to reduce the tax cost setting amount for certain depreciating assets, to the entity's terminating value for the assets.
Answer 5
The Commissioner ruled that Division 58 of the ITAA 1997 will apply such that subsection 705-47(2) of the ITAA 1997 will operate to reduce the tax cost setting amount for the depreciating assets to the entity's terminating value for the assets.
Question 6(a)
The ruling concerned whether the entity's 'your area' pursuant to subsection 43-120(1) of the ITAA 1997 is part of the construction expenditure area of the relevant capital works on the leased land.
Answer 6(a)
The Commissioner ruled that the entity's 'your area' pursuant to subsection 43-120(1) of the ITAA 1997 will be part of the construction expenditure area of the relevant capital works on the leased land.
Question 6(b)
The ruling concerned whether the entity's 'your area' pursuant to subsection 43-120(2) of the ITAA 1997 is part of the construction expenditure area of the relevant capital works on the leased land.
Answer 6(b)
The Commissioner ruled that the entity's 'your area' pursuant to subsection 43-120(2) of the ITAA 1997 will be part of the construction expenditure area of the relevant capital works on the leased land.
Question 7
The ruling concerned whether the entity's 'your area' pursuant to subsection 43-115(1) of the ITAA 1997 is part of the construction expenditure area of the relevant capital works of which the entity owns.
Answer 7
The Commissioner ruled that the entity's 'your area' pursuant to subsection 43-115(1) of the ITAA 1997 will be part of the construction expenditure area of the relevant capital works that it owns.
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