Income Tax Assessment Act 1997

CHAPTER 2 - LIABILITY RULES OF GENERAL APPLICATION  

PART 2-10 - CAPITAL ALLOWANCES: RULES ABOUT DEDUCTIBILITY OF CAPITAL EXPENDITURE  

Division 40 - Capital allowances  

Subdivision 40-F - Primary production depreciating assets  

Operative provisions

SECTION 40-515   Water facilities, horticultural plants, fodder storage assets and fencing assets  

40-515(1)    
You can deduct an amount equal to the decline in value for an income year (as worked out under this Subdivision) of a ^* depreciating asset that is one of these:

(a) a ^* water facility;

(b) a ^* horticultural plant;

(c) a *fodder storage asset;

(d) a *fencing asset.

Note 1:

Sections 40-540 , 40-545 , 40-548 and 40-551 show you how to work out the decline.

Note 2:

Generally, only one taxpayer can deduct amounts for a depreciating asset. However, if you and another taxpayer jointly hold the asset, each of you deduct amounts for it: see section 40-35 .

Conditions

40-515(2)    
However, the applicable condition in section 40-525 must be satisfied for the ^* depreciating asset.

Limit on deduction

40-515(3)    

You cannot deduct more in total than:

(a) for a * water facility - the amount of capital expenditure (disregarding expenditure that you cannot deduct because of section 26-100 (about water infrastructure improvement expenditure)) incurred on the facility; or

(b) for a * horticultural plant - the amount of capital expenditure incurred on the plant; or

(c) for a *fodder storage asset - the amount of capital expenditure incurred on the asset; or

(d) for a *fencing asset - the amount of capital expenditure incurred on the asset.

Reduction of deduction: water facilities, fodder storage assets and fencing assets

40-515(4)    

You must reduce your deduction for a ^* water facility, *fodder storage asset or *fencing asset for an income year by the part of the decline in value of the facility or asset that is attributable to the period (if any) in the income year when it was:

(a) not wholly used in carrying on a ^* primary production business on land in Australia; or

(b) not wholly used for a ^* taxable purpose.

40-515(5)    

Paragraph (4)(a) does not apply to a ^* water facility if the expenditure incurred on the construction, manufacture, installation or acquisition of the water facility was incurred by an ^* irrigation water provider.

Meaning of irrigation water provider

40-515(6)    

An irrigation water provider is an entity whose ^* business is primarily and principally the supply (otherwise than by using a ^* motor vehicle) of water to entities for use in ^* primary production businesses on land in Australia.