Edited version of private advice

Authorisation Number: 1052081154634

Date of advice: 25 January 2023

Ruling

Subject:Temporary full expensing

Question

Will the proposed arrangement qualify for temporary full expensing under subdivision 40-BB of the Income Tax (Transitional Provisions) Act 1997 (Cth)?

Answer

Yes

This ruling applies for the following period:

1 July XXXY to 30 June XXXX

The scheme commences on:

1 July XXXY

Relevant facts and circumstances

1.         The taxpayer is considering buying and installing relocatable buildings (called modules) inside its business premises in the XXXX income year.

2.         The taxpayer designs, manufactures, and services equipment in a certain industry.

3.         The taxpayer carried on business for the XXXY income year and continues to do so in the XXXX income year.

4.         The taxpayer's aggregated turnover was less than $50M for the XXXY income year.

5.         The taxpayer currently occupies a leased building. Part of the leased premises is vacant.

6.         The taxpayer plans to install modules in these premises. They would be installed inside the existing leased building to provide additional workshop capacity in a modular manner without significant modification to the leased building.

7.         The modules will be manufactured elsewhere and either lifted whole into place by cranes or separated into components for transport and then reassembled on delivery.

8.         It will buy the modules from third party suppliers. They won't be hired.

9.         The modules can be described as temporary portable buildings. The modules facilitate easy addition, removal, or relocation. Each module will:

•                be resting on the ground inside the leased building

have electrical power provided by plug/socket

•                be without connected plumbing or other services

•                be fitted with doors, windows, floor coverings, lights, power outlets, and air conditioner.

The taxpayer has said that office buildings displayed on a particular company's website are a typical modular building which it's considering. These buildings broadly have a 'site shed' exterior and the interiors appear consistent with office use.

10.      The taxpayer will use the modules (once installed) exclusively for its own business purposes. It will use them as a light workshop and office space. They won't be held as trading stock to sell to other entities.

11.      The taxpayer may keep the modules in place but wants flexibility to move them around if necessary. It wants to keep flexibility to move the modules around within the premises or re-locate at the end of the lease to new premises. The modules would likely stay in one place for at least one year so long as the taxpayer is happy with the configuration.[1]

12.      The taxpayer considers this arrangement will help it carry out its business. The taxpayer purpose-built the premises some years ago, but they don't suit the business today as it has grown. It would be expensive to reconfigure the premises again today. Part of the premises are vacant, so modules will give the taxpayer the opportunity to make optimal use of that part of the premises. The modules will allow the taxpayer to add, remove, or relocate modules, unlike a permanent fit-out which will require the landlord's assent, and will become their property at the end of the lease. It isn't considering acquiring new premises as they have extra space but need to reconfigure it.

Assumptions

•                The taxpayer won't allocate the modules to a low-value pool under subdivision 40-E of the Income Tax Assessment Act 1997.

•                The taxpayer won't choose not to apply the temporary full expensing rules to the modules.

•                The taxpayer won't stop holding the modules or stop having them installed ready for use during the XXXX income year.

Relevant legislative provisions

Income Tax Assessment Act 1997

section 40-25

section 40-30

section 40-40

section 40-45

section 40-295

section 43-15

section 43-20

section 43-70

section 45-40

section 328-110

Income Tax (Transitional Provisions) Act 1997

section 40-150

section 40-155

section 40-157

section 40-160

section 40-170

section 40-190

Income Tax Assessment Act 1936

Former section 82KSC

Fringe Benefits Tax Assessment Act 1986

section 58X

Reasons for decision

In these reasons:

•                ITAA 1997 means the Income Tax Assessment Act 1997

•                Division 40, Division 43, and Division 328 refer to those divisions in the Income Tax Assessment Act 1997

•                ITTP means the Income Tax (Transitional Provisions) Act 1997

•                subdivision 40-BB means that subdivision in the Income Tax (Transitional Provisions) Act 1997.

Question

Will the proposed arrangement qualify for temporary full expensing under subdivision 40-BB?

Summary

13.      Yes. The proposed arrangement will qualify for temporary full expensing. The taxpayer and its proposed purchase and use of the modules will meet all the conditions in subdivision 40-BB. The exclusion for assets for which capital works deductions under Division 43 would be available won't apply here. We conclude that capital works deductions won't be available because the modules will qualify under the extended definition of 'plant' in section 45-40 of the ITAA 1997.

14.      Eligibility depends on the facts including the taxpayer's proposed use for the modules. Relocatable modular buildings wouldn't necessarily qualify as 'plant' if they were applied to a different use.

Detailed reasoning

Brief overview of the TFE qualification requirements: business entities must have aggregated turnover under $5 billion, and start to hold a depreciating asset between 6 October 2020 and 30 June 2023.

15.      The temporary full expensing rules allow eligible entities to claim an upfront deduction for the cost of qualifying depreciating assets. The temporary full expensing rules in subdivision 40-BB modify the decline in value for which you claim a deduction under section 40-25 of the ITAA 1997. Very broadly, the entity must:

•                be a business with aggregated turnover under $5 billion (or meet an alternative test)

•                start to hold the asset after 6 October 2020, but on or before 30 June 2023

•                start to use the asset, or install it ready to use, for a taxable purpose.

16.      Temporary full expensing has the effect of modifying the general depreciation rules for depreciating assets.

•                You can claim a deduction for the decline in value of a depreciating asset under section 40-25 of the ITAA 1997.

•                Broadly, Division 40 works out the 'decline in value' under one of two alternative methods based on the asset's 'cost'. Cost is worked out under rules in subdivision 40-C of the ITAA 1997. Very broadly, cost includes 'first element' and 'second element'.

•                However, subdivision 40-BB allows the decline in value for a depreciating asset to be worked out under either section 40-160 or section 40-170 of the ITTP where you and the asset meet conditions. (If those provisions apply, other decline in value rules in the ITAA 1997 or the ITTP don't apply - see section 40-145 of the ITTP.)

•                Broadly, where section 40-160 of the ITTP applies, and you started to use the asset in the current year, the decline in value will be the asset's cost.

•                Again, broadly, where section 40-170 applies of the ITTP applies, you can deduct the asset's 'eligible second element' for the current income year.

17.      There are many exclusions in the temporary full expensing rules, including one for capital works. One exclusion in subsection 40-150(2) of the ITTP is that temporary full expensing isn't available where Division 40 deductions aren't available because section 40-45 of the ITAA 1997 applies. Subsection 40-45(2) denies deductions under Division 40 where deductions are available under Division 43 of the same Act. Broadly, Division 43 allows deductions for capital works expenditure which meets requirements in that Division.

We summarise the conditions and exclusions in the Table.

Table: TFE conditions from sections 40-160 and 40-170 of the ITTP

The modules are depreciating assets: they will decline in value over time and are treated as separate assets to the premises for CGT purposes.

18.      One threshold condition for temporary full expensing is that the relevant asset must be a depreciating asset.

19.      Depreciating asset is defined in section 40-30 of the ITAA 1997.

•                Subsection 40-30(1) says a depreciating asset is an asset that has a limited effective life and can reasonably be expected to decline in value over the time it's used.

•                However, the definition excludes land, items of trading stock, and intangible assets, except intangible assets covered by subsection 40-30(2).

•                Subsection 40-30(3) says Division 40 applies to improvements to land and fixtures on land as if they were separate from the land (whether removable or not).

20.      The modules meet the first limb of the definition of a depreciating asset. Site sheds and similar mobile buildings deteriorate over time through use and wear and tear. They would need to be replaced or repaired after some years. Therefore, they have limited life and decline in value, meeting subsection 40-30(1) of the ITAA 1997. They will be depreciating assets unless excluded by subsection 40-30(2).

21.      The only exclusion relevant in subsection 40-30(2) is 'land'. The taxpayer will be using the modules as office and workshop space, rather than selling them to others, so they won't be trading stock. Modules are physical things, so they won't be intangible assets. We need to determine if the modules will be treated as part of the land for the purposes of Division 40.

22.      Improvements and fixtures aren't defined in the ITAA 1997[5], so we've looked to other sources for guidance.

•                Dictionaries suggest improvements are things, additions, or changes that increase the land's value or make the use of the land more efficient.[6]

•                Fixtures are chattels or articles attached to the land which are legally treated as being part of the land (rather than personal property of the person who attached it).[7]

•                Two legal reference works suggest whether a chattel has become a fixture depends on the circumstances; relevant factors include the degree of affixation and the purpose of affixation.[8] The ATO has similar guidance in TD 97/24.[9]

23.      The ATO view is that 'improvements' has a slightly different meaning in this context. TR 2012/7[10] at paragraphs 9, and 89 to 92 says an improvement, as used in Division 40, is simply an identifiable alteration to the land which enhances the land's usefulness to the user, even if it doesn't increase the land's value. Improvements excludes things that are fixtures in this context. ATO ID 2008/50[11] suggests an improvement needs to have a discrete and identifiable separate function to the land.

24.      These modular buildings will be treated as separate CGT assets to the land and building, and not part of it.

•                We characterise these modules, under their proposed use, as separate chattels, not fixtures. See paragraphs 44 and 45.

•                The modules can be probably described as improvements to land because they make the premises more useful to the taxpayer. They will make the premises more useful to the occupant because they'll give the taxpayer extra office and workshop space to use in its business, without refitting or seeking alternative premises. The modules mightn't improve the land's value because the taxpayer may be able to remove them at the end of the lease. But the ATO view in TR 2012/7 is that this isn't an essential condition to be an improvement to land in the sense used by Division 40.

•                Therefore, the modules would be treated as separate assets to the land under subsection 40-30(3) of the ITAA 1997.

•                If the modules weren't classified as improvements, they would still be treated as separate assets anyway. The deeming rule in subsection 40-30(3) of the ITAA 1997 wouldn't be necessary because they would be treated as separate assets under general law.

25.      It follows that the modules are depreciating assets. They will be treated as separate assets to the land, so they won't be excluded from being depreciating assets under subsection 40-30(2).

TFE isn't available if expenditure qualifies for capital works deductions or the asset is treated as an eligible work-related item for FBT purposes.

26.      To repeat, TFE isn't available where capital works deductions are available.

27.      The TFE rules modify the decline in value you claim under Division 40. The effect of sections 40-160 and 40-170 of the ITTP is that where you meet specified conditions, the decline in value of a depreciating asset for Division 40 purposes will be modified.

28.      One of those conditions is that the asset must be 'covered' by section 40-150 of the ITTP. Subsection 40-150(2) says you aren't covered by that section if Division 40 doesn't apply because of section 40-45 of that Act. Section 40-45 of the ITAA 1997 says Division 40 doesn't apply to:

•                capital works for which you can deduct amounts under Division 43[12]

•                assets treated as eligible work-related items under section 58X of the Fringe Benefits Tax Assessment Act 1986.

29.      Therefore, we need to determine whether the taxpayer can claim capital works deductions for the building under Division 43, or whether they could be eligible work-related items. We'll address capital works deductions at paragraphs 30 through 48, and eligible work-related items at paragraphs 50 through 53.

The proposed purchase of modules will qualify as capital works on a building or a capital improvement in the general meaning of those terms.

30.      Broadly, Division 43 allows deductions for qualifying capital works. We won't detail all the conditions, as many aren't immediately relevant. As a threshold, section 43-20 of the ITAA 1997 says Division 43 applies to:

•                capital works being a building (or an extension, alteration, or improvement to a building)[13]

•                capital works that are structural improvements (or extensions, alterations, or improvements to structural improvements).[14]

You deduct a portion of your construction expenditure: see section 43-15 of the ITAA 1997.

31.      The terms 'building' and 'structural improvement' broadly cover structures or constructions on land.

•                They aren't defined in the ITAA 1997, so we look to ordinary usage and context.

•                Dictionaries suggest 'building' means a substantial or permanent fixed structure.[15] They usually would have a roof and walls or form an enclosure. Houses, factories, stables, and sheds are listed as examples.

•                'Structure' includes things which are built or constructed like buildings.[16]

•                'Improvements' are generally things that improve the value, or alternatively the use, of land.[17]

•                The ordinary meaning seems consistent with the context and purpose: Division 43 is about working out deductions for construction expenditure for capital works.

32.      We think 'capital works' in this context means something constructed for business purposes. The term isn't defined, but dictionaries suggest one meaning of 'capital' means money or property directed to an income producing or business use.[18] That's broadly consistent with case law in the tax context, which suggests 'capital' means something which produces a lasting advantage for a business. (We touch on this at paragraphs 36 and 37.) Dictionaries show a wide range of meanings for 'work' - but they include tasks or undertakings, building operations, or engineering structures.[19] Again, the context is about working out deductions for construction expenditure. So 'capital works' would cover construction or building for business or income producing purposes.

33.      The proposal meets the threshold requirements. The modules, while transportable and temporary, are substantial structures somewhat like site sheds, and will be used as workshop and office space. They will make the premises more useful to the occupant because they'll give the taxpayer extra office and workshop space to use in its business, without refitting or seeking alternative premises. We've also characterised them as a capital asset as we explain at paragraph 37. Therefore, their installation would qualify as capital works being a building or structural improvement.

'Construction expenditure' must be 'capital expenditure' - the modules will qualify as capital expenditure because they're intended to achieve a lasting advantage for the taxpayer's business.

34.      To qualify for deductions, the qualifying capital works must have construction expenditure.

35.      This is a defined term. Subsection 43-70(1) of the ITAA 1997 says construction expenditure is capital expenditure incurred in respect of the construction of capital works. However, subsection 43-70(2) says construction expenditure doesn't include a list of types of expenditure. Relevantly, paragraph 43-70(2)(e) excludes expenditure on 'plant'.

36.      'Construction expenditure' broadly means expenditure which achieves a lasting advantage for a business. There's ATO guidance about this term (as used in section 40-880 of the ITAA 1997) in TR 2011/6[20] at paragraphs 13, and 64 through 68. It says that 'capital expenditure' isn't a defined term, but whether expenditure is capital in nature is determined on a case-by-case basis, considering principles from case law. It repeats Dixon J's commonly cited passage from Sun Newspapers,[21] which highlights three considerations in distinguishing capital from revenue expenditure. They are:

•                the character of the advantage sought (lasting qualities and recurrence may be relevant)

•                the manner in which it's to be used, relied upon or enjoyed (recurrence may be relevant)

•                the means adopted to obtain it (periodical reward or outlay).

37.      Applying these tests, we think the module purchase will be capital expenditure. The taxpayer is buying and installing the modules for business use as office and light workshop space. It intends to keep them in place for at least one year and wants to keep the flexibility to rearrange them or potentially move them to new premises when the current lease expires. The arrangement will allow it to better use its premises rather than switch premises or incur expenses in refitting the premises. They'll be capital assets from the taxpayer's perspective. In buying the modules, the taxpayer is seeking a lasting advantage for its business, it's buying them (rather than hiring them through recurrent hire or rent payments) and intends to have them available to use for an extended and indefinite period.

38.      Therefore, the modules will qualify as capital expenditure unless the exception for 'plant' in paragraph 43-70(2)(e) applies.

The exception for plant applies: the modules fall within the extended meaning of 'plant' because they qualify as 'articles'.

39.      'Plant' is given an extended meaning in tax legislation. Section 45-40 says plant 'includes' a list of named items, which include 'articles'. The ATO view is that the meaning of 'plant' in section 45-40 doesn't displace the ordinary meaning. See TR 2004/16[22] at [27] and TR 2007/9[23] at [32].

40.      ATO rulings give some guidance about the ordinary meaning of plant.

•                Items aren't plant if they form part of the premises - this is a question of fact and degree. [TR 2004/16 at 12-13; TR 2007/9 at 8-9]

•                Items that aren't part of the premises might be plant if they are closely related to the taxpayer's income earning activities. [TR 2004/16 at 29, TR 2007/9 at 38-39.]

•                Things that are merely the 'setting' for the taxpayer's income earning activities aren't plant. [TR 2004/16 at 29, TR 2007/9 at 33 and 38, TR 1999/2[24] at paragraph 21]

41.      Applying this guidance, we don't think the modules fit the ordinary meaning of plant. They are temporary and easily moved, so they won't be part of the premises. But we don't think they are closely related to the taxpayer's income producing activities. The taxpayer's business is about designing, manufacturing, and servicing control systems for mobile machinery. The modules will be used as light workshop and office space. They'll be merely setting for the taxpayer's activities.

42.      Broadly, 'articles' means items of moveable property. 'Article' isn't defined, so we've looked at dictionaries and ATO guidance. Dictionaries suggest 'article' has a wide, generic meaning - covering items, things, goods, commodities, and property.[25] ATO guidance broadly suggests articles are goods or property which aren't structures or fixtures. We'll summarise some proportions from TR 2004/16 and TR 2007/9.

•                An item can't be an article if it's a structure erected or built on, or into, land, or forms part of the premises. But it can still be an article even though it's attached to the premises.[26]

•                Article isn't defined but has a wide meaning, which isn't limited in this context.[27]

•                Article means 'a piece of goods or property'.[28]

•                Something isn't an article if it's part of the fabric of a structure.[29]

43.      There's also a Tax Determination about whether accommodation units can be depreciating assets. TD 97/24 was about whether a taxpayer can depreciate accommodation units in a caravan or tourist park. We'll set out some propositions it makes.

•                An item is an article where it's a chattel as opposed to a fixture.

•                Whether an accommodation unit is a chattel or a fixture depends on the circumstances.

•                Generally, it's a chattel when it merely rests on land or is affixed in a way which facilitates easy removal, or where the purpose and mode of affixing is for the more complete enjoyment of the unit as a chattel.

•                An intention that a unit remain in place for a substantial period of time doesn't necessarily preclude it being a chattel. Units that are designed or constructed as portable or movable are not structures in the nature of buildings.

•                However, an accommodation unit fixed to the ground may lose its identity as a chattel and become part of that land, that is, a fixture. A unit is a fixture if it can't be removed, or if it has been affixed with the intention that it shall remain in position permanently or for an indefinite or substantial period and it's securely fixed in such a way that it can't be detached without substantial injury to the land or the unit itself.

•                An article isn't a fixture; article can't include a structure erected or built in. Where an accommodation unit stops being a chattel and becomes a fixture, it stops being an article.

44.      Very broadly, a fixture is a chattel that's so attached to the land that it becomes part of the land, not the personal property of the person who attached it. Halsbury's Laws of Australia[30] and The Encyclopaedic Australian Legal Dictionary[31] suggest that whether an item is a fixture depends on the circumstances, but relevant considerations include the degree and purposeof the annexation or affixation. There's no single determinative consideration, but the greater the degree of annexation, the more likely it's a fixture. Likewise, if something's intended to be in place permanently or for a long time, it's more likely to be a fixture. As a general rule, the landowner will own items that have become fixtures, while tenants may remove items which they have attached to the land if they remain chattels. That general rule can be varied by agreement.

45.      We think the modules in this proposed arrangement will be chattels rather than fixtures.

•                The degree of affixation is light and not permanent. Modular office buildings are basically 'site sheds'. These buildings are re-locatable, don't significantly modify the leased building, and can be easily added, removed, or relocated. They will just rest on the ground, without plumbing, although they'll be connected to electricity.

•                Objectively, that light degree of affixation supports the inference that they are intended to be temporary and not permanent.

•                We think the taxpayer's purpose in attaching them also suggests they aren't permanent. The taxpayer intends to retain flexibility to move them around, reconfigure, and if necessary relocate them to other premises at the end of the lease.

46.      Applying TD 97/24, the modules will be articles because they're chattels and not fixtures.

47.      Since the modules are articles, they fit the extended meaning of plant.

48.      It follows that capital works deductions won't be available for the modules under Division 43.

49.      Our reasoning is a decision on these facts, including the taxpayer's proposed use for the modules. It's possible that relocatable modular buildings wouldn't qualify as 'plant' (and might qualify for capital works deductions) if they were applied to a different use.

The modules aren't eligible work-related items for FBT purposes: they aren't tools of trade because their proposed use is simply a site or location for business activities.

50.      The standard depreciation rules don't apply to assets treated as eligible work-related items for FBT purposes. Subsection 40-45(1) says Division 40 doesn't apply to an asset that's an eligible work-related item for the purposes of section 58X of the Fringe Benefits Tax Assessment Act 1986. For this exclusion to apply, the relevant benefit provided by the employer must also be an expense payment benefit or a property benefit under that Act.

51.      'Eligible work-related item' is a defined term for FBT purposes. Subsection 58X(2) of the Fringe Benefits Tax Assessment Act 1986 lists five types of item which qualify as 'eligible work-related items' if they are primarily for use in the employee's employment. They include portable electronic devices, computer software, protective clothing, briefcases, and tools of trade.

52.      An ATO Interpretative Decision gives some guidance about this last phrase, 'tools of trade'. ATO ID 2006/248[32] says 'tool of trade' isn't defined, so it cited dictionaries and a Federal Court of Australia decision when discussing its meaning. It suggests a 'tool of trade' needs to qualify as a tool, and also be basic equipment required for a particular operation. To loosely paraphrase, a 'tool' means things used to apply manual force, or to carry out some occupation or pursuit.

53.      These modules aren't eligible work-related items for FBT purposes. They aren't tools of trade: they are basically site sheds and the taxpayer will use them as office or workshop space. Employees will use them as a place of work to carry out the taxpayer's business activities (designing, manufacturing, and maintaining control systems for mobile machinery). The modules are just the housing, setting, or workplace from which the employees carry out their tasks - they won't be used directly in their tasks in the sense a tool would be. None of the other types of eligible work-related items are relevant.

Conclusion: the modules qualify for temporary full expensing.

54.      These modules qualify for temporary full expensing. They are depreciating assets because they decline in value over time and aren't treated as part of the land. They meet all the conditions in subdivision 40-BB. The exclusion for assets for which Division 43 capital works deductions won't apply, because the modules qualify under the extended definition of 'plant' in section 45-40 of the ITAA 1997.

55.      Eligibility for temporary full expensing depends on the facts including the taxpayer's proposed use for the modules. Relocatable modular buildings wouldn't necessarily qualify as 'plant' if they were applied to a different use.

[1] 21 December 2022 email.

[2] This isn't a condition for full expensing of the eligible second element of cost under section 40-170.

[3] For eligible second element expensing under section 40-170, you can start to use the asset or have it installed in an earlier income year.

[4] Broadly, you're a small business if you carry on business, and either your aggregated turnover for the previous year is less than $10 million, or your aggregated turnover for the current year is likely to be less than $10 million. You can't rely on the projected turnover for the current year if your aggregated turnover exceeded the threshold in the two previous income years. See section 328-110 of the ITAA 1997.

[5] 'Improvement' had an inclusive definition in former section 82KZC of the Income Tax Assessment Act 1936, but the definition was repealed in 2006. Broadly, improvements to land included the constructing buildings or other structures on land, or extending, altering, or adding to them.

[6] LexisNexis Australia (2022) Encyclopaedic Australian Legal Dictionary, (entry for 'improvement') accessed at https://advance.lexis.com on 15 December 2022; Macquarie Dictionary Publishers (2022) The Macquarie Dictionary online, (entry for 'improvement') accessed at www.macquariedictionary.com.au on 15 December 2022; Mann T (ed) (2018) Australian Law Dictionary, 3^rd edition, (entry for 'improvement') accessed at www.oxfordreference.com on 15 December 2022; Oxford University Press (2004) Australian Oxford Dictionary, 2^nd edition, (entry for 'improvement') accessed at www.oxfordreference.com on 15 December 2022.

[7] LexisNexis Australia (2022) Encyclopaedic Australian Legal Dictionary, (entry 'fixture') accessed on 15 December 2022; Macquarie Dictionary Publishers (2022) The Macquarie Dictionary online, (entry for 'fixture') accessed on 15 December 2022; Mann T (ed) (2018) Australian Law Dictionary, 3^rd edition, (entry for 'fixture') accessed on 15 December 2022; Oxford University Press (2004) Australian Oxford Dictionary, 2^nd edition, (entry for 'fixture') accessed on 15 December 2022.

[8] Carter J (2015) Halsbury's Laws of Australia, LexisNexis Australia at [355-2365 through 355-2400], accessed at https://advance.lexis.com on 15 December 2022; LexisNexis Australia (2022) Encyclopaedic Australian Legal Dictionary, (entry 'fixture') accessed on 15 December 2022.

[9] Taxation Determination TD 97/24 Income Tax: what types of accommodation units used in a caravan/tourist park business can a taxpayer depreciate under section 42-15 of the Income Tax Assessment Act 1997 ('the Act') and what depreciation rates should the taxpayer use?

[10] Taxation Ruling TR 2012/7 Income tax: capital allowances: treatment of open pit mine site improvements.

[11] ATO Interpretative Decision ATO ID 2008/50 Income tax Capital Allowances: depreciating asset - improvement to land - gully dam.

[12] It also says Division 40 doesn't apply where you could deduct amounts under Division 43 had the expenditure been incurred earlier or the capital works been used for a different purpose.

[13] There are time conditions. Capital works in Australia must have started after 21 August 1979. Capital works outside Australia must have started after 21 August 1990.

[14] The structural improvements must have started after 26 February 1992.

[15] Macquarie Dictionary Publishers (2022) The Macquarie Dictionary online, accessed on 21 December 2022; Oxford University Press (2004) Australian Oxford Dictionary, 2^nd edition, accessed on 4 January 2023 (entries for 'building').

[16] The Macquarie Dictionary online, accessed on 22 December 2022; Australian Oxford Dictionary, 2^nd edition, accessed on 16 January 2023 (entries for 'structure').

[17] LexisNexis Australia (2022) Encyclopaedic Australian Legal Dictionary, (entry for 'improvement') accessed on 15 December 2022; Macquarie Dictionary Publishers (2022) The Macquarie Dictionary online, (entry for 'improvement') accessed on 15 December 2022; Mann T (ed) (2018) Australian Law Dictionary, 3^rd edition, (entry for 'improvement') accessed at www.oxfordreference.com on 15 December 2022; Oxford University Press (2004) Australian Oxford Dictionary, 2^nd edition, (entry for 'improvement') accessed on 15 December 2022.

[18] The Macquarie Dictionary online, accessed on 11 January 2023; Australian Oxford Dictionary, 2^nd edition, accessed on 11 January 2023 (entries for 'capital').

[19] The Macquarie Dictionary online, accessed on 11 January 2023; Australian Oxford Dictionary, 2^nd edition, accessed on 11 January 2023 (entries for 'work').

[20] Taxation Ruling TR 2011/6 Income tax: business related capital expenditure - section 40-880 of the Income Tax Assessment Act 1997 core issues.

[21] Sun Newspapers Ltd and Associated Newspapers Ltd v Federal Commissioner of Taxation (1938) 61 CLR 337, at 363 per Dixon J.

[22] Taxation Ruling TR 2004/16 Income tax: plant in residential rental properties.

[23] Taxation Ruling TR 2007/9 Income tax: circumstances when an item used to create a particular atmosphere or ambience for premises used in a café, restaurant, licensed club, hotel, motel or retail shopping business constitutes an item of plant.

[24] Taxation Ruling TR 1999/2 Income tax: deductibility of expenditure incurred on tailings dams or similar mining residue, waste storage or disposal facilities.

[25] The Macquarie Dictionary online, accessed on 11 January 2023; Australian Oxford Dictionary, 2^nd edition, accessed on 11 January 2023; LexisNexis Australia (2022) Encyclopaedic Australian Legal Dictionary, accessed on 11 January 2023.

[26] TR 2004/16 at paragraphs 15-17; TR 2007/9 at paragraphs 13-16.

[27] TR 2004/16 at paragraph 38; TR 2007/9 at paragraph 53.

[28] TR 2004/16 at paragraph 38; TR 2007/9 at paragraph 53.

[29] TR 2004/16 at paragraph 38; TR 2007/9 at paragraph 53.

[30] Carter J (2015) Halsbury's Laws of Australia, LexisNexis Australia at [355-2365 through 355-2400], accessed on 15 December 2022.

[31] LexisNexis Australia (2022) Encyclopaedic Australian Legal Dictionary, (entry 'fixture') accessed on 15 December 2022.

[32] ATO Interpretative Decision ATO ID 2006/248 Fringe Benefits Tax Exempt Benefits: work-related item - tool of trade.