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01 Dec 11 Business related ("blackhole") capital expenditure - s 40-880 of ITAA 1997 - TR 2011/6

On 30 November 2011, the ATO issued Taxation Ruling TR 2011/6 entitled "Income tax: business related capital expenditure - s 40-880 of ITAA 1997 core issues".

It was previously released in draft form as TR 2010/D7.

The Ruling considers aspects of s 40-880 of ITAA 1997 by identifying the key issues which need to be resolved to establish entitlement to a deduction under the provision.

The Ruling specifically considers:

  • the type of expenditure to which section 40-880 applies;
  • the nexus required for capital expenditure to be 'in relation to' a current, former or proposed business;
  • the requirement that the business be carried on for a taxable purpose; and
  • limitations and exceptions to a deduction.


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