Commonwealth Consolidated Acts

INCOME TAX ASSESSMENT ACT 1997 - SECT 40.645

  (1)   You can deduct amounts for capital expenditure you incur on * connecting power to land or upgrading the connection if, when you incur the expenditure:

  (a)   you have an interest in the land or are a share - farmer carrying on a * business on the land; and

  (b)   you or another entity intends to use some or all of the electricity to be supplied as a result of the expenditure in carrying on a business on the land for a * taxable purpose at a time when you have an interest in the land or are a share - farmer carrying on a business on the land.

  (2)   You can also deduct amounts for capital expenditure you incur on a telephone line on or extending to land if, when you incurred the expenditure:

  (a)   a * primary production business was carried on the land; and

  (b)   you had an interest in the land or you were a share - farmer carrying on a primary production business on the land.

  (3)   The amount you can deduct is 10% of the expenditure:

  (a)   for the income year in which you incur it; and

  (b)   for each of the next 9 income years.

Note 1:   Various provisions may reduce the amount you can deduct or stop you deducting. For example, see:

• Division   26 (limiting deductions generally); and
• section   40 - 650 (specifying expenditure you cannot deduct under this Subdivision); and
• Division   245 (which may affect your entitlement to a deduction if your debts are forgiven).

Note 2:   If you recoup an amount of the expenditure, the amount will be included in your assessable income. See Subdivision   20 - A.