Is it really black hole expenditure? If so, can we claim it presentation?

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Publication date: 25 Nov 08

Source: SOUTH AUSTRALIAN DIVISION, TAXATION INSTITUTE OF AUSTRALIA

Abstract:

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.

Author profile:
David Zweck FTIA
David is a Director of Taxation Services at MacKenzie Coultas Chartered Accountants in Adelaide. David has over 19 years experience in providing accounting, taxation and business advisory services to his clients who are privately owned businesses and high net worth individuals. David enjoys working closely with his clients assisting them in resolving their problems and planning for the future. David works across a number of industries including wholesale distribution, property and professional services. He also assists his clients in developing retirement and succession strategies
Current at 25 February 2009

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