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Is It Really Black Hole Expenditure? If So, Can We Claim It?

25 Nov 2008
Education Development Centre, Hindmarsh
SA

Part of the Bi-monthly briefing series, this event covered a tax update and the main topic concerning "black holes".

Individual sessions from this event:

November tax update

Author(s):  Pasqualina CALLEA

This presentation covers all tax changes that have occurred in the preceding two months.

Material from this session:

Is It Really Black Hole Expenditure? If so, can we claim it?

Author(s):  David ZWECK

Section 40-880 is probably the most important tax deduction provision after section 8-1. If this section could meet its stated objective, then business expenditure would (if nothing else) be deductible over time. However, practitioners need to be aware that there is effectively an ordering rule to be considered when dealing with business-related capital expenditure - that is Section 40-880 is a measure of last resort.

This presentation looks at the black hole provisions and considers the expanded range of expenses which may be included in the cost base of an asset for CGT purposes or which could form part of the cost of a depreciating asset under the uniform capital allowances regime.

This presentation uses examples, and covers topics including:

  • the business relationship necessary for black hole deductions
  • application to proposed businesses and businesses that have ceased
  • expenditure in relation to ‘other' rights (and how the ATO got it right)
  • black hole deductions in relation to goodwill
  • application to leases
  • other exclusions that may be relevant
  • certain expenditure in relation to property development.

Material from this session:

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