Edited version of private advice

Authorisation Number: 1051886703525

Date of advice: 16 August 2021

Ruling

Subject: Depreciating asset and capital works

Question 1

Are the pipelines, marine loading arm and tank treated as separate depreciating assets or as a single depreciating asset for the purposes of Division 40 of the Income Tax Assessment Act 1997 (ITAA 1997)?

Answer

The pipelines, marine loading arm and tank are treated as a single depreciating asset for the purposes of Division 40 of the ITAA 1997 in these circumstances.

Question 2

Is the concrete culvert that houses a section of pipelines a capital work for the purposes of Division 43 of the ITAA 1997?

Answer

The concrete culvert is a structural improvement for the purposes of Division 43 of the ITAA 1997.

This ruling applies for the following period:

Income year ending 30 June XXXX

Relevant facts and circumstances

The Taxpayer is installing the following items:

•         pipes/ pipelines;

•         a loading arm (including all pipes, cabling, and associated equipment for the purpose of unloading fuel; and

•         a tank.

They comprise a system that is new and installed as one.

The system is designed to unload fuel, transport fuel that is unloaded to store in the tank (at the terminal, fuel trucks are loaded at the loading gantry for distribution to customers).

The pipelines

The pipelines will be used for the carriage of various fuels.

The proposed pipeline will be constructed above the ground, underground and at ground level (approximately).

The above ground section of the pipeline will rest on pipeline supports, being concrete plinths.

An expansion loop connects the above ground pipeline to the underground pipeline.

The section of the pipeline will be enclosed in a concrete culvert.

The pipeline includes pipes, apparatus, valve, valve chamber, manhole, and inspection pit.

The pipe is a steel pipe.

Apparatus includes any instrumentation and control equipment.

There is a manhole for access and inspection purposes - this is usually a flange that can be opened and forms part of the pipeline.

The Taxpayer does not fall within an industry listed in Taxation Ruling TR 2021/3 Income tax: effective life of depreciating assets (applicable from 1 July 2021).

Relevant legislative provisions

Income Tax Assessment Act 1997 Division 40

Income Tax Assessment Act 1997 subsection 40-30(4)

Income Tax Assessment Act 1997 Division 43

Income Tax Assessment Act 1997 section 43 -20

Income Tax Assessment Act 1997 section 43 -20

Income Tax Assessment Act 1997 section 45-40

Reasons for decision

Question 1

Summary

The pipes/ pipelines (including apparatus, valve, valve chamber, manhole (i.e. a flange that can be opened and forms part of the pipeline) and concrete plinths), the loading arm (including all pipes, cabling, and associated equipment for the purpose of unloading fuel) and the (repurposed) tank are treated as a single depreciating asset for the purposes of Division 40 of the ITAA 1997.

Detailed reasoning

Division 40 of the ITAA 1997

Division 40 of the ITAA 1997 provides a deduction for the decline in value of depreciating assets based on their effective life.

A 'depreciating asset' is an asset that has limited effective life and that can reasonably be expected to decline in value over the time it is used.

Relevantly, the Commissioner has provided guidance on whether something is a single depreciating asset or otherwise in Taxation Ruling TR 2021/3 Income tax: effective life of depreciating assets (applicable from 1 July 2021) and Draft Taxation Ruling TR 2017/D1 Income tax: composite items and identifying the depreciating asset for the purposes of working out capital allowances.

TR 2021/3 discusses the methodology used by the Commissioner of Taxation in making determinations of the effective life of depreciating assets under section 40-100 of the ITAA 1997. Notwithstanding a taxpayer may choose to use the Commissioner's determination of the effective life of a depreciating asset or may make their own estimate, it remains that in making the determinations, the Commissioner has made an assessment of whether the thing in question is a single depreciating asset or a collection of various depreciating assets

TR 2017/D1 sets out the Commissioner's views on how to determine whether a composite item is itself a depreciating asset or whether its components are separate depreciating assets for the purposes of Division 40 (capital allowances). A 'composite item' is an item that is made up of a number of components that are capable of separate existence. Whether a particular composite item is itself a depreciating asset or whether one or more of its components are separate depreciating assets is a question of fact and degree to be determined in the circumstances of the particular case (subsection 40-30(4) of the ITAA 1997).

The Commissioner's Guiding principles sets out the matters that need to be taken into account:

Guiding principles

5. For a component (or more than one component) of a composite item to be considered to be a depreciating asset, it is necessary that the component (or components) is capable of being separately identified or recognised as having commercial and economic value.

6. Purpose or function is generally a useful guide to the identification of an item.[6] The main principles that are taken into account in determining whether a composite item is a single depreciating asset, or more than one depreciating asset, are:

(a)

'Identifiable': the depreciating asset will tend to be the item that performs a separate identifiable function, having regard to the purpose or function it serves in its business context.

(b)

'Use': a depreciating asset will tend to be an item that performs a discrete function. However, the item need not be self-contained or able to be used on a stand-alone basis.

(c)

'Degree of integration': the depreciating asset will tend to be the composite item where there is a high degree of physical integration of the components.

(d)

'Effect of attachment': the item, when attached to another asset having its own independent function, varies the performance of that asset.

(e)

'System': a depreciating asset will tend to be the multiple components that are purchased as a system to function together as a whole and which are necessarily connected in their operation.

7. The relevant function considered in this context is the actual function the item is to serve in the particular taxpayer's income producing activity, rather than any theoretical function to which the item could be put in other circumstances...

8. To determine if a composite item is a single depreciating asset or more than one depreciating asset, the relative functions of the entire item, against its components, need to be considered in the circumstances in which they are used...

9. A single depreciating asset is not necessarily the smallest possible component which can be identified within a composite item. Several components or parts of a composite item which work together with other components may be parts of a larger functional item, particularly where those components are integrally linked.

10. An item may be considered to be a separate depreciating asset notwithstanding it performs some wider or commercially more 'complete' function in combination or conjunction with other items that are themselves separate depreciating assets...

11. The mere fact that an item cannot operate on its own and has no commercial utility unless linked or connected to another item or items tends to indicate that it will form part of a composite item, rather than being a separate depreciating asset. An item that is designed to be functionally interchangeable, or is used in this way, with other items may indicate there are separate depreciating assets...

12. An absence of a fixed physical connection between separate components of a composite item tends to indicate that each separate component is a depreciating asset...

13. Where an element of a system is purchased or installed at a different time to the system (irrespective of its intended operation within a system) and has a separate identifiable function, that element may be a separate depreciating asset...

The intention of these principles is to assist taxpayers gain an objective overall impression of whether an item is one or more than one depreciating asset.

Interaction between TR 2017/D1 and TR 2021/3

The structure of TR 2021/3 is that if your activities come under a particular ANZIC code you must use Table A. The ruling states:

How to use Tables A and B

10. Table A is an industry category table which lists assets that are peculiar to a particular industry or for which a particular effective life is appropriate because of the way the asset is used in that industry. The industry headings in Table A are drawn, where possible, from the classification subject categories in the Australian and New Zealand Standard Industrial Classification (ANZSIC) codes.

•                     Only a participant of a listed industry can use the Table A entries for that industry.

•                     If an asset either corresponds exactly to a description in Table A for the industry in which it is used or it satisfies the general description of an asset used in the functional process of that industry, the effective life is the life specified.

•                     If the particular asset is not listed under the relevant industry heading in Table A, either specifically or under a general functional group/class, then the industry participant can use a relevant effective life shown in Table B.

At paragraphs 12 to 13 the Commissioner states:

12. Before using an effective life determination in Table A or B, taxpayers must first be satisfied that the asset in question is a depreciating asset for the purposes of Division 40. An asset being a depreciating asset as used by a particular taxpayer or industry may not necessarily be a depreciating asset for another taxpayer or industry.

13. If a particular asset is not listed in either Table A or B then the Commissioner has not made a determination of its effective life and you will need to work out its effective life yourself (see section 40-105 and Appendix 1, Working out your own effective life - paragraphs 46 to 49 of this Ruling).

In these paragraphs the Commissioner directs the reader to determine whether the asset in question is a depreciating asset. While the Commissioner gives a comprehensive description of how the effective life of an asset is determined for the tables, it is an implicit requirement that a taxpayer must first identify the depreciating asset in question and whether they have a single depreciating asset or multiple depreciating assets.

The Commissioner, in Table A and B,identifies numerous assets that, while made up of different functional elements, are nevertheless identified as a single depreciating asset for the purposes of Division 40 of the ITAA 1997.

A number of cases have considered whether something is a depreciating asset or a collection of distinct depreciating assets:

•         Federal Commissioner of Taxation v. Tully Co-operative Sugar Milling Association Limited 83 ATC 4495 explains the importance of identifying whether there is a whole something, which is to be ordinarily found in the intended function or purpose of the thing in question:

A question which arises is the identification of the ''unit of property'', more fully described in the section as the ''new unit of eligible property''. Having in mind the definition of ''eligible property'' in sec. 82AQ(1) the starting point is with sec. 54, which deals with depreciation on plant and articles, and gives ''plant'' a very wide meaning. It is not disputed that the items in question here, including, for example, the concrete foundation in question, are ''plant or articles''.

Several items, each of which at some stage could for presently relevant purposes be regarded as a unit, can be combined, or linked or associated together so as to form a larger unit. When one looks to see whether there is a unit, one normally looks to see whether there is a whole something. Whether there is a whole will normally be judged by the intended function or purpose of that which is being looked at. On the other hand, there can be a unit when some part is missing without which the larger whole cannot function in the intended way.

I should state that what might otherwise be regarded as a unit does not cease to qualify as such because it comprises one or more, or many, integers, each of which could, at some stage of the development of the whole, be regarded as a unit.

The learned Judge took the view that the whole pumping station comprised a unit, and that the items in question were part of it, indeed an essential part. He was looking at the larger whole, of which the items had become an integral part. This was essentially a finding of fact, and I see no reason to disturb it.

From the case that led to this appeal, the learned judge said:

It is first necessary to identify what is the 'new unit of eligible property' with respect to which the taxpayer incurred expenditure. The appellant submits that the mixed juice pumping station itself comprises the relevant unit. Whilst it is plain that an electric motor, or a starter may in appropriate circumstances itself be a unit, the evidence here shows that each of these components has become an integral part of the pumping station. It may be noted that the Kelly and Lewis pumps (in respect of which expenditure has apparently been allowed) were delivered to the site with the relevant motors (in respect of which expenditure has not been allowed) attached to them. The station obviously would not function without the pumps, and the pumps obviously could not function without the motors or the starters. Two pumps are necessary because during the crushing season the milling must continue on a 24 hour basis.''

This identification is a question of fact that rests on the function or purpose of the thing in question (Federal Commissioner of Taxation v. Tully Co-operative Sugar Milling Association Limited 83 ATC 4495 per Lockhart J at 4499 to 4504):

It is true that ultimately the question what constitutes ''a unit of eligible property'' depends on the facts of the particular case, but some guidance to the Commissioner and taxpayers is called for. In my view, the nearest one can get to enunciating a test of fairly general application is that it is the function or purpose of the particular item to which one looks to see if it answers the description on the facts of the case of ''a unit of eligible property''. It is not necessary that it be functionally operative though in many circumstances this may be called for. For example, if five parts are installed in an assembly line and all that is needed to render the line operative is a sixth part, but until that part is installed no part may function or operate, the functional incompleteness does not necessarily deprive each of the five units of its character as ''a unit of eligible property'' for the purposes of the Assessment Act. It depends on the facts of the case. Yet, at other times a ''unit'' may not come into being until all the components have been assembled. For example, a farm fence is made up of a number of posts and rails or wires. It is difficult to conceive of any ''unit'' coming into being until the fence is erected. A concrete mixer installed on the back of a truck was held by Kitto J. in Ready Mixed Concrete (Vic.) Pty. Ltd. v. F.C. of T. 69 ATC 4038; (1969) 118 C.L.R. 177 to be a ''unit of property''. His Honour said (at ATC p. 4042; C.L.R. p. 184):

''Notwithstanding the mode and degree of annexation, the truck and the mixer are functionally separate and independent units of property. The function of delivery belongs to the truck. The use of the mixer is for mixing, as a step in the production of concrete in the condition required for pouring, and its nature is understated to the point of misdescription by saying that the machine - for that is what it is - is ordinarily used for delivery.''

•         Ready Mixed Concrete (Vic.) Pty. Ltd. v. Federal Commissioner of Taxation 69 ATC 4038 explains the importance of the separateness and design of the thing in question - whether the thing is really a component of the total whole (in this case, whether the mixer is a component of a total vehicle comprising itself and the truck, being a vehicle ordinarily used for the delivery of ready mixed concrete):

During the year ended 30 June 1967 the appellant purchased, for sums totalling (after sales tax refunds), $74,494, certain articles called transit mixers for use in producing assessable income in connection with its business of a producer and supplier of ready mixed concrete. The main element in a transit mixer is a drum resembling a large steel barrel, on its side but tilted towards one end.

....

The unit is constructed to be mounted on a truck or similar vehicle so that, while doing its work in connection with the concrete inside, it may be transported from the producer's plant, the ''batching plant'', to the place where the customer requires it to be delivered. The mixer depends for its operation upon its own motor only.

...

Some were acquired for use, and were in fact used, he says, only by owner-drivers of motor trucks under agreements that they would permit the affixing of the mixers to their trucks (though without affecting the ownership of the mixers) and would themselves operate the trucks and the mixers in the course of the supply of ready mixed concrete by the appellant to its customers.

•         Wangaratta Woollen Mills Ltd. v. Federal Commissioner of Taxation 69 ATC 4095 explains the importance of considering whether the thing in question is essential to the operation of a larger whole thing such that the thing comprises the complex whole:

I am of opinion that the plaintiff's dyehouse is ''in the nature of a tool'' in the trade and does ''play a part'' itself in the manufacturing process. It is much more than a convenient setting for the plaintiff's operations. It is an essential part of the efficient and economic operation of the plaintiff's business. The complex ventilation system including the cavity wall does more than merely clear the atmosphere. Its structure is an active tool in preventing spoiling of material, and in enabling the operatives to carry out their tasks. It would be completely unnecessary in almost every other industry and quite useless to any buyer except a dyer. The protective coatings and tiling are essential in preserving the whole ''tool''. It is as unreal to dissect the paint or tile from its foundation as it is to separate the paint from a workman's tool of trade. The drains do not just remove waste liquids, they remove volatile liquids which would disrupt the process as much as vapours escaping from the vats. If boiling liquids were left uncovered in the building, in vats or drains the whole process would quickly become unworkable. I think therefore that the dyehouse should be regarded as a single unit of plant and not a collection of bricks mortar, paint, timber etc. each of which is to be separately examined. It is not merely a special factory; it is a complex whole in which every piece is essential for the efficient operation of the whole, I would however except from the description of ''plant'' what might be referred to as the external ''cladding'' of the dyehouse, that is the external walls including the single walls at the east and west ends and the roof as distinct from the ceiling, but not the controlled louvres or the cowlings in the roof. The cladding really does nothing more than exclude the elements and whilst I am not convinced of the validity of this distinction nevertheless it is clearly supported by prior decisions on this sort of question.

In this case, we are determining the nature of the system - that is:

•         the pipes/ pipelines (including apparatus, valve, valve chamber, manhole (i.e. a flange that can be opened and forms part of the pipeline) and concrete plinths);

•         the loading arm (including all pipes, cabling, and associated equipment for the purpose of unloading fuel); and

•         the tank.

Each element of the system is not designed and constructed independently to operate in a wide range of settings. Rather, all elements of the systems are designed and constructed to function in the particular environment/location in which the system will operate.

Summary

In deciding the question of whether the system is a single depreciating asset or multiple depreciating assets, there are a number of key factors to take into account, as supported by the various cases referred to above. The following factors help explain how we determined that the system is more properly regarded as a single depreciating asset.

1)    A starting point is whether, with regard to each of the elements of the system identified, there is a potential bigger item that could itself be considered a depreciating asset of which the element may form a part.

2)    Were the various elements designed, constructed and installed to meet the specific requirements of the bigger item (as opposed to being easily adaptable to use in a range of settings)?

3)    Does each element of the bigger 'item' have a significant degree of physical integration into the bigger item?

4)    Does each element serve an important role in the overall function of the bigger 'item'?

5)    Was each element acquired as part of the bigger 'item'? Or was the bigger 'item' already fully capable of fulfilling its function prior to the addition of the new element, such that the new element serves a different function or merely enhances, but is not pivotal to, the functioning of the bigger 'item'?

In this case, the bigger 'item' is system. The primary function of the bigger 'item' is to unload fuel, transport fuel that is unloaded to store in the tank (at the terminal, fuel trucks are loaded at the loading gantry for distribution to customers).That is the fundamental purpose of the system. While there are a number of smaller functions that make up the 'overall' function, all of the smaller functions are pivotal to the satisfaction of the overall function.

Conclusion

The system is a single depreciating asset. Each element was designed, constructed and installed to meet the specific requirements of the system. The tailoring of each element to the system means they are not easily adaptable to use in a range of settings and are not intended to be switched between different settings. Physically the majority of the elements have a significant degree of integration into the system.

Each of the elements also serves a vital role in the overall functionality of the system.

In conclusion, while there are many parts to the system, each of which performs its own function, every element of the facility was included in the overall planning of the system, tailored to the particular circumstances of the system, physically incorporated into the system, and served to enable the system to fulfil its overall function.

Question 2

Summary

The concrete culvert is a structural improvement for the purposes subsection 43-20 - that is not plant within the meaning of that term in section 45-40 of the ITAA 1997.

Detailed reasoning

Division 43 of the ITAA 1997

In broad terms, Division 43 of the ITAA 1997 provides a deduction over time for construction expenditure on capital works used to produce assessable income.

Section 43-20 of the ITAA 1997 defines capital works to encompass three categories:

(a)  buildings - including extensions, alterations and improvements to buildings;

(b)  structural improvements- including extensions, alterations and improvements to structural improvements, and

(c)   environment protection earthworks- including extensions, alterations and improvements to environment protection earthworks.

Meaning of 'structural improvements'

Relevantly, subsection 43-20(2) of the ITAA 1997 provides that Division 43 of the ITAA 1997 applies to capital works being structural improvements (including an extension, alteration or improvement to such structural improvements) begun after 26 February 1992.

'Structural improvements' is not defined for the purposes of subsection 43-20(2) of the ITAA 1997 and will consequently take its ordinary meaning in the absence of a contrary intention. The Explanatory Memorandum to Taxation Laws Amendment Bill No 3 of 1992 (No. 93 of 1992), which introduced section 124ZFB of the Income Tax Assessment Act 1936 (ITAA 1936), explains that structural improvement is to take its meaning from the ordinary understanding of that expression and broadly, it means property constructed on land out of material or related parts which improves the land. (See paragraph 9.18. Section 124ZFB of the ITAA 1936 was the predecessor to section 43-20 of the ITAA 1997 and the Commissioner is of the view that the former and current provision express the same idea. Section 1-3 states that where the ITAA 1997 contains provisions of the ITAA 1936 in a rewritten form and that if the ITAA 1997 appears to have expressed the same idea in a different form of words in order to use a clearer or simpler style, the ideas are not to be taken to be different.)

The term 'structural' connotes some form of building or construction. This indicates the requirement for the creation of a significant feature.

The term 'improvement' is not necessarily to be understood as indicating a qualitative character in the sense that it makes something better in some sense or more valuable. It equally applies to describe an alteration in characteristics(see for example NT86/8971 and Commissioner of Taxation [1988] AATA 220; (1988) 19 ATR 3691; 88 ATC 694).

Subsection 43-20(3) of the ITAA 1997 gives some examples of structural improvements:

a)    paragraph 43-20(3)(a) lists sealed roads, sealed driveways, sealed car parks, sealed airport runways, bridges, pipelines, lined road tunnels, retaining walls, fences, concrete or rock dams and artificial sports fields as examples of structural improvements.

b)    paragraph 43-20(3)(b) lists earthworks that are integral to the construction of a structural improvement -other than those excluded by the operation of subsection 43-20(4)- such as embankments, culverts and tunnels associated with a runway, road or railway as examples of structural improvements.

Subsection 43-20(4) of the ITAA 1997 specifically excludes certain structural improvements from the operation of Division 43:

a)    paragraph 43-20(4)(a) excludes, subject to the operation of subsection 43-20(5), earthworks that are not integral to the installation or construction of a structure, are permanent (assuming they are maintained in reasonably good order and condition), and can be economically maintained in reasonably good order and condition for an indefinite period, and lists unlined channels, unlined basins, earth tanks and dirt tracks as examples of earthworks that are not structural improvements.

Other examples include a bowling green constructed from synthetic or artificial materials.

b)    paragraph 43-20(4)(b) excludes structural improvements being earthworks that merely create artificial landscapes, and lists grass golf course fairways and greens, gardens, and grass sports fields as examples of earthworks that are not structural improvements.

Other examples include a bowling green constructed from natural materials.

The Explanatory Memorandum to Taxation Laws Amendment Bill No 3 of 1992 (No. 93 of 1992), which introduced section 124ZFB of the ITAA 1936, explains that earthworks which affect the general usefulness of the land are not treated as integral to the construction of a structure ⁽see for example NT86/8971 and Commissioner of Taxation [1988] AATA 220; (1988) 19 ATR 3691; 88 ATC 694).

The term 'earthworks' generally connotes some form of excavation, movement and/or placement of earth. The illustrative examples described in paragraph 43-20(4)(a) of the ITAA 1997 indicate a nature and extent of work that is relatively simple and unsophisticated.

Interaction between the meaning of 'capital works' and the meaning of 'property' and 'plant'

The meaning of 'property'

'Property' has its ordinary meaning. Buildings, structural improvements and environment protection earthworks would all fall within this ordinary meaning.

The meaning of 'plant'

The term 'plant' for the purposes of Division 43 of the ITAA 1997 is defined under section 995-1, which provides that it has the meaning given by section 45-40 - which defines it to take its ordinary meaning and to include certain other things.

The ordinary meaning of plant

Taxation Ruling TR 1999/2 provides the following overview of the ordinary meaning of plant:

20. '[Plant] in its ordinary sense...includes whatever apparatus is used by a business man for carrying on his business, - not his stock-in-trade which he buys or makes for sale; but all goods and chattels, fixed or moveable, live or dead, which he keeps for permanent employment in his business': Lindley LJ in Yarmouth v. France (1887) 19 QBD 647 at 658.

The Commissioner considers that whether a 'building', 'structural improvements' or 'environmental protection earthworks' is plant within the ordinary meaning for the purposes of section 45-40 of the ITAA 1997 will depend on:

a)    whether it is more than a mere setting for the taxpayer's operations; and if it is

b)    whether the function performed by the thing is so related to the taxpayer's operations or special that it warrants it being held to be plant (see for example Macquarie Worsteds Pty Ltd v. FC of T 74 ATC 4121 at 4125; (1974) 4 ATR 334).

Using capital works for the purpose of the taxpayer's income producing activities does not, of itself, make the capital works plant. For something that is a capital works to constitute plant, it must not merely be a setting in which the income producing activities are carried on (see e.g. J. Lyons & Co Ltd v. The Attorney-General (1944) 1 All ER 477, [1944] Ch 281).

Where the function of the capital works is no more than to provide a location on which income producing activities can be carried on, then this will be another form of setting which indicates that the item is not plant. As noted in Benson (Inspector of Taxes) v. Yard Arm Club Ltd [1979] 2 All ER 336; (1979) 1 WLR 347; (1979) 53 TC 67, per Buckley LJ (endorsing Templeman J in St John's School (Mountford and Knibbs) v. Ward (Inspector of Taxes) [1974] STC 69 at 77; 49 Tax Cas 524 at 533).

If one asks the same question here - namely whether the chemistry laboratory and the gymnasium are the premises in which the business is carried on or are part of the plant with which the business is carried on - the answer must be the former. Education is not carried out with these particular buildings but in these particular buildings...

Buildings, structural improvements and environmental protection earthworks may be considered plant where they are significantly integrated with the taxpayer's income producing operations, play an active part in an industrial process and are physically integrated with items of machinery. For example:

•         the dye house in Wangaratta Woollen Mills Ltd v. Federal Commissioner of Taxation (1969) 119 CLR 1; (1969) 1 ATR 329; 69 ATC 4095

•         the drydock in Inland Revenue Commissioners v. Barclay, Curle and Co Limited [1969] 1 All ER 732; [1969]1WLR 675; (1969) 45 TC 221

•         the grain silo in Schofield (Inspector of Taxes) v. R & H Hall Limited (1974) 49 TC 538, and

•         the breakwater in Port of Portland Pty Ltd v. Commissioner of Taxation [2008] AATA 1162; 2008 ATC 10-071; 73 ATR 994.

The predominant function of the concrete culvert is to provide a 'setting' that is concerned with protection of the site where the pipeline is located. The concrete culvert is a structural improvement for the purposes subsection 43-20 - that is not plant within the meaning of that term in section 45-40 of the ITAA 1997.

In conclusion, the concrete culvert is a capital work for the purposes of Division 43 of the ITAA 1997.