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 40-545   How you work out the decline in value for horticultural plants  

40-545(1)    
The decline in value of a * horticultural plant for the income year in which it starts to decline in value is all of the capital expenditure attributable to the establishment of the plant if its * effective life is less than 3 years.

40-545(2)    
You work out the decline in value for an income year of a * horticultural plant whose * effective life is 3 years or more in this way:


  Establishment
expenditure
× Write-off days in income year
365
× Write-off rate  

where:

establishment expenditure is the amount of capital expenditure incurred that is attributable to the establishment of the * horticultural plant.

write-off days in income year is the number of days in the income year on which you satisfied a condition in subsection 40-525(2) for the plant and either used it for * commercial horticulture or held it ready for that use.

write-off rate is the rate shown in this table for the * horticultural plant according to its * effective life.


Write-off rate for horticultural plant
Item Effective life of: The write-off rate is:
1 3 to fewer than 5 years 40%
.
2 5 to fewer than 6 ⅔ years 27%
.
3 6 ⅔ to fewer than 10 years 20%
.
4 10 to fewer than 13 years 17%
.
5 13 to fewer than 30 years 13%
.
6 30 years or more 7%



Limit on write-off days

40-545(3)    
Disregard your use of the * horticultural plant on a day outside the period that:


(a) starts when the plant can first be used for * commercial horticulture; and


(b) extends for the time shown in this table (depending on the plant's * effective life).


Period after which you cannot count use of horticultural plant
Item Effective life: Time limit:
1 3 to fewer than 5 years 2 years and 183 days
.
2 5 to fewer than 6 ⅔ years 3 years and 257 days
.
3 6 ⅔ to fewer than 10 years 5 years
.
4 10 to fewer than 13 years 5 years and 323 days
.
5 13 to fewer than 30 years 7 years and 253 days
.
6 30 years or more 14 years and 105 days



 

Disclaimer and notice of copyright applicable to materials provided by CCH Australia Limited

CCH Australia Limited ("CCH") believes that all information which it has provided in this site is accurate and reliable, but gives no warranty of accuracy or reliability of such information to the reader or any third party. The information provided by CCH is not legal or professional advice. To the extent permitted by law, no responsibility for damages or loss arising in any way out of or in connection with or incidental to any errors or omissions in any information provided is accepted by CCH or by persons involved in the preparation and provision of the information, whether arising from negligence or otherwise, from the use of or results obtained from information supplied by CCH.

The information provided by CCH includes history notes and other value-added features which are subject to CCH copyright. No CCH material may be copied, reproduced, republished, uploaded, posted, transmitted, or distributed in any way, except that you may download one copy for your personal use only, provided you keep intact all copyright and other proprietary notices. In particular, the reproduction of any part of the information for sale or incorporation in any product intended for sale is prohibited without CCH's prior consent.