Published on 25 Nov 08
by SOUTH AUSTRALIAN DIVISION, THE TAX INSTITUTE
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.
The Tax Institute is a Recognised Tax Agent Association (RTAA) under the Tax Agent Services Regulations 2009.
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