Income Tax Assessment Act 1997

CHAPTER 2 - LIABILITY RULES OF GENERAL APPLICATION  

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

Division 43 - Deductions for capital works  

Subdivision 43-D - Deductible uses of capital works  

Operative provisions

SECTION 43-140   Using your area in a deductible way  

43-140(1)  


The following table sets out the way you must use * your area in an income year for a deduction to be allowed under section 43-10 (the main deduction provision). The relevant use depends on the time when the capital works began (Column 1) and the type of capital works (Column 2). Column 3 sets out the use.
TABLE 43-140 - Current year use


Column 1 Column 2 Column 3
Date capital works begin Type of capital works Use of your area at some time in the income year
Time period 1: After 30/6/97 Any capital works You use *your area for the purpose of:
(a) producing assessable income; or
(b) conducting *R & D activities.
Time period 2: 27/2/92 to 30/6/97 (inclusive) *Hotel building You use *your area for the *purpose of producing assessable income.
*Apartment building You use *your area for the *purpose of producing assessable income.
Other capital works You use *your area for the purpose of:
(a) producing assessable income; or
(b) conducting *R & D activities.
Time period 3: Before 27/2/92 *Hotel building You use *your area for the *purpose of producing assessable income and:
(a) all or part of that area is used by any entity wholly or mainly to operate a hotel, motel or guest house; and
(b) that hotel, motel or guest house has at least 10 bedrooms that are used or available for use wholly to provide short-term accommodation for travellers.
*Apartment building You use *your area for the *purpose of producing assessable income and:
(a) that area is, is part of or contains an apartment, unit or flat that is used or available for use by any entity wholly to provide short-term accommodation for travellers, and you own or lease at least 9 other apartments, units or flats in the building that are used or available for use by any entity wholly to provide short-term accommodation for travellers; or
(b) that area is, is part of or contains a facility that is used or available for use by any entity wholly or mainly in association with providing short-term accommodation for travellers in apartments, units or flats in the building that are used in the way described in paragraph (a).
Other capital works You use *your area for the purpose of:
(a) producing assessable income; or
(b) conducting *R & D activities.

Note 1:

There are special rules that explain or qualify the uses described in Column 3 of this Table. These rules are set out in Subdivision 43-E (sections 43-155 to 43-195 ). For example:

  • · Your area is taken to be used, for use or available for use for a purpose or in a way if it is maintained ready for use for that purpose or in that way. See section 43-160 .
  • · R & D activities must be conducted in connection with a business carried on for the purpose of producing assessable income, see section 43-195 .
  • Note 2:

    If Division 250 applies to you and an asset that is a capital work:

  • (a) if section 250-150 applies - you are taken not to be using the capital work for the purpose of producing assessable income, or for the purpose of conducting R & D activities, to the extent specified under subsection 250-150(3) ; or
  • (b) otherwise - you are taken not to be using the capital work for such a purpose.
  • 43-140(2)  


    This Division applies to an entity as if the entity used property for the * purpose of producing assessable income if the entity uses the property for:


    (a) * environmental protection activities; or


    (b) the environmental impact assessment of a project;

    unless a provision of this Act expressly provides that that use is not for the purpose of producing assessable income.


     

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