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-B - Establishing the deduction base  

Operative provisions

SECTION 43-70   What is construction expenditure?  

43-70(1)  
Construction expenditure is capital expenditure incurred in respect of the construction of capital works.

43-70(2)  
Construction expenditure does not include:


(a) expenditure on acquiring land; or


(b) expenditure on demolishing existing structures; or


(c) expenditure on clearing, levelling, filling, draining or otherwise preparing the construction site prior to carrying out excavation works; or


(d) expenditure on landscaping; or


(e) expenditure on * plant; or


(f) expenditure on property for which a deduction is allowable, or would be allowable if the property were for use for the * purpose of producing assessable income, under:


(i) Subdivision 40-F (about primary production depreciating assets), Subdivision 40-G (about capital expenditure of primary producers and other landholders), Subdivision 40-H (about capital expenditure that is immediately deductible) or Subdivision 40-I (about capital expenditure that is deductible over time); or

(ii) the former Division 330 of this Act or the former Division 10 , 10AAA or 10AA of Part III of the Income Tax Assessment Act 1936 (all of which dealt with mining and/or quarrying); or

(iii) section 73A of the Income Tax Assessment Act 1936 (about expenditure on scientific research); or

(iv) the former Subdivision 387-A of this Act or the former section 75D of the Income Tax Assessment Act 1936 (both of which allowed deductions for capital expenditure to prevent land degradation); or

(v) the former Subdivision 387-B of this Act or the former section 75B of the Income Tax Assessment Act 1936 (both of which allowed deductions for capital expenditure on facilities to conserve or convey water); or

(vi) the former Subdivision 387-G of this Act or the former section 124F or 124JA of the Income Tax Assessment Act 1936 (all of which allowed deductions for capital expenditure on forestry roads and/or timber mill buildings); or


(fa) any of these kinds of expenditure if a deduction is allowable for the expenditure, or would be allowable if property had been used for the purpose of producing assessable income:


(i) * mining capital expenditure or * transport capital expenditure;

(ii) expenditure on a * forestry road in connection with carrying on a * timber operation for a * taxable purpose;

(iii) expenditure for the construction or acquisition of a * timber mill building;

(iv) expenditure on a * depreciating asset you can deduct under subsection 40-80(1) (about exploration and prospecting); or


(g) expenditure on property for which a deduction under section 355-305 or 355-520 is allowable for the property, or would be allowable if the property were for use for conducting *R & D activities; or


(h) eligible heritage conservation expenditure within the meaning of the former Subdivision AAD of Division 17 of Part III of the Income Tax Assessment Act 1936 ; or


(i) expenditure that you cannot deduct because of section 26-100 (about water infrastructure improvement expenditure).


 

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