| Disclaimer You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4. |
Edited version of private advice
Authorisation Number: 1051855537160
Date of advice: 29 June 2021
Ruling
Subject: Temporary full expensing - relocatable buildings characterised as chattels
Question
Is the entity entitled to obtain temporary full expensing under Subdiv 40-BB: 86-804 of the Income Tax (Transitional Provisions) Act 1997 (Cth) for the cost of the relocatable building on the basis that the relocatable buildings are a depreciable asset under s 40-30 of the Income Tax Assessment Act 1997 (Cth)?
Answer
Yes. In accordance with Tax Determination 97/24 at paragraph 4, the relocatable buildings are a chattel as they will 'merely rest' on the leased building and are affixed in such a way to facilitate easy addition, removal and relocation. Furthermore, the fact that the relocatable buildings shall remain in the same place for a 'substantial period of time' will not preclude it being a chattel.
This ruling applies for the following period:
30 June 20XX
The scheme commences on:
1 July 20YY
Relevant facts and circumstances
The entity leases two buildings at the Property. One building contains an office and a workshop, while the second building only contains a vacant amenities area with a vacant floor area of XXXm2.
The entity intends on placing relocatable buildings ('modules') inside the second building. This will allow for additional workshop capacity without needing to make significant modification to the leased building. The modules will be purely used to produce assessable income.
The modules are designed to facilitate easy addition, removal and relocation. They will either be manufactured offsite and will be delivered via a crane or a truck, or alternatively, the components will be delivered to delivered to the Property and be assembled on-site.
Each module will rest on the ground of the Property, with the electrical power provided by a plug and socket and will not be connected to the plumbing or any other services.
All modules will be fitted with doors, windows, floor coverings, lights, power outlets and an air conditioner.
Relevant legislative provisions
Income Tax (Transitional Provisions) Act 1997 (Cth) Section 86-804
Income Tax Assessment Act 1997 (Cth) Section 40-30