Commonwealth Consolidated Acts Commonwealth Consolidated Acts(1) The construction expenditure area of capital works begun after 30 June 1997 is the part of the capital works on which the * construction expenditure was incurred that, at the time when it was incurred by an entity, was to be owned or leased by the entity or held by the entity under a * quasi - ownership right over land granted by an * exempt Australian government agency or an * exempt foreign government agency.
Note: Section 43 - 80 explains when capital works begin.
(2) The construction expenditure area of capital works begun before 1 July 1997 is the part of the capital works on which the * construction expenditure was incurred that:
(a) at the time when it was incurred by an entity, was to be owned or leased by the entity or held by the entity under a * quasi - ownership right over land granted by an * exempt Australian government agency or an * exempt foreign government agency; and
(b) at the time of completion of construction, was to be used in the way described in Column 3 of Table 43 - 90 (intended use at completion) for the time period when the capital works began as set out in Column 1.
(3) There is taken to be a construction expenditure area for capital works purchased by an entity from another entity if:
(a) the capital works would have had a construction expenditure area but for the fact that the other entity did not incur capital expenditure in constructing the capital works; and
(b) the other entity is not an * associate of the entity; and
(c) the other entity constructed the capital works on land that it owned or leased in the course of a business that included the construction and sale of capital works of that kind.
Note: Subsection (3) makes capital works purchased from a speculative builder eligible for deduction in the hands of the first and subsequent purchasers.
(4) The construction of the capital works must be complete before the * construction expenditure area is determined.
(5) Only one * construction expenditure area is created each time an entity constructs capital works.
Example: An entity undertakes the construction of a building. During the course of construction, the entity makes 3 progress payments to the builder. There is still only one construction expenditure area.
(6) A separate * construction expenditure area will be created each time an entity undertakes the construction of capital works.
Example: In the diagram below, area 1 relates to the original construction of a building which gives rise to one construction expenditure area . Area 2 is a subsequent extension of the same building which gives rise to another, while area 3 is a later renovation of the entire building which gives rise to another.
