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Blackhole Expenditure Amendments: Will blackholes still exist?

Published on 11 May 2006 | Took place at Radisson Plaza Hotel, Sydney , NSW

The recent Tax Laws Amendment (2006 Measure No. 1) Bill 2006 replaces s 40-880 of the Income Tax Assessment Act 1997 by repealing the existing blackhole expenditure provisions and by expanding the allowable deductions for certain business-related capital expenses that are not otherwise recognised and are not denied a deduction elsewhere in the income tax law. These changes should give clients an opportunity to claim a tax deduction over five years in respect of capital expenditure or at least allow the capital expenditure to be included in the cost base of the asset.

Individual sessions

Blackhole expenditure amendments: will blackholes still exist?

Author(s):  Neil WICKENDEN

Topics covered in this paper include:

  • business-related costs
    • what is new?
    • comparing the old to the new provision
    • examples of capital expenditure previously capitalised and now deductible
    • exceptions and limitations
    • interaction with the consolidation regime
  • termination of a lease or licence - when can the five year write off apply?
  • CGT amendments - changes to the cost base provisions
    • transitional provisions
  • uniform capital allowances - how they are affected by the Bill.
Materials from this session: