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-F - Calculation of deduction  

Operative provisions

SECTION 43-215   Deduction for capital works begun before 27 February 1992  



Step 1

Calculate the amount worked out using the formula:


Your CE × Days used × Applicable rate
365

where:

your CE is * your construction expenditure.

days used is the number of days in the income year that you owned or were the lessee of * your area and used it in the way that applies to the capital works under Table 43-140 (Current year use).

applicable rate is:

  • (a) 0.04 if the capital works began after 21 August 1984 and before 16 September 1987; or
  • (b) 0.025 in any other case.
  • Note:

    For the purpose of working out the applicable rate, capital works begun after 15 September 1987 are taken to have begun before 16 September 1987 in certain circumstances. See section 43-220 .


    Step 2

    This step applies only to * hotel buildings and * apartment buildings. Reduce the Step 1 amount by the extent to which:

  • (a) for a hotel building - any part of * your area was not used wholly or mainly to operate a hotel, motel or guest house; or
  • (b) for an apartment building - any part of * your area was not used wholly for or in association with providing short-term accommodation for travellers.

  • Step 3

    Reduce the Step 1 or 2 amount by the extent to which:

  • (a) for a * hotel building or * apartment building - * your area was used only partly for the * purpose of producing assessable income; or
  • (b) for any other capital works - * your area was used only partly for the * purpose of producing assessable income or conducting * R & D activities.
  • Note:

    This Step applies if:

  • · part of your income from the capital works is exempt income; or
  • · part of the capital works were not used for the purpose of producing assessable income or were not available for that use; or
  • · the capital works were not used for such a purpose during a part of the days used period.

  • Step 4

    The amount of your deduction is the lesser of your Step 3 amount or the * undeducted construction expenditure for * your area.


     

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