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Ruling
Subject: Interpretation of section 110-25 of the Income Tax Assessment Act 1997
Question 1
Will section 110-25 of the Income Tax Assessment Act 1997 (ITAA 1997) apply to a payment such that the amount will be included in the cost base of the relevant asset?
Answer
Yes
The scheme commences on:
February 2012
Relevant facts and circumstances
An entity makes a capital payment that increases value of a relevant asset.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 110-25.
Reasons for decision
Based on the facts, the requirements of subsection 110-25(5) are satisfied as the expected effect of the expenditure is to increase or preserve the value of the asset.
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