Income Tax Assessment Act 1997
View history note
Hide history noteNote: A Commissioner ' s Remedial Power (CRP 2017/2) is relevant to this part of the tax law. Taxation Administration (Remedial Power - Small Business Restructure Roll-over) Determination 2017 (F2017L01687) modifies the operation of s 40-340 of the Income Tax Assessment Act 1997 and any other provisions of a taxation law whose operation is affected by the modified operation of s 40-340 in relation to an asset transferred under a small business restructure roll-over (item 8 of the table in s 40-340(1) ).
The operation of the relevant provisions is modified as follows:
If s 40-340 of ITAA 1997 provides for rollover relief in relation to a disposal of a depreciating asset because the condition in item 8 of the table in s 40-340(1) of ITAA 1997 is satisfied in relation to the asset, that section has effect as if it also provided that the disposal of the asset has no direct consequences under the income tax law (other than Div 40 of ITAA 1997).
The modification applies in respect of transfers on or after 8 May 2018.
An entity must treat a modification as not applying to it or any other entity if the modification would produce a less favourable result for it. The Commissioner is empowered by s 370-5 of Sch 1 to the Taxation Administration Act 1953 to make modifications, by legislative instrument, to ensure the law is administered to achieve its intended purpose or object.
SECTION 40-630 Landcare operations 40-630(1)
You can deduct capital expenditure you incur at a time in an income year on a * landcare operation for:
(a) land in Australia you use at the time for carrying on a * primary production business; or
(b) rural land in Australia you use at the time for carrying on a * business for a * taxable purpose from the use of that land (except a business of * mining and quarrying operations).
Note:
If Division 250 applies to you and an asset that is land:
40-630(1A)
A * rural land irrigation water provider can deduct capital expenditure it incurs at a time in an income year on a * landcare operation for:
(a) land in Australia that other entities use at the time for carrying on * primary production businesses; or
(b) rural land in Australia that other entities use at the time for carrying on * businesses for a * taxable purpose from the use of that land (except a business of * mining and quarrying operations);
being entities supplied with water by the rural land irrigation water provider.
40-630(1B)
A rural land irrigation water provider is:
(a) an * irrigation water provider; or
(b) an entity whose * business is primarily and principally the supply (otherwise than by using a * motor vehicle) of water to entities for use in carrying on * businesses (except businesses of * mining and quarrying operations) using rural land in Australia.
Exception: plant
40-630(2)
However, you cannot deduct an amount under this Subdivision for capital expenditure on * plant, except:
(a) a fence erected for a purpose described in paragraph 40-635(1)(a) or (b); or
(b) a dam or structural improvement (except a fence) covered by paragraph (1)(c), (d), (e) or (f) of the definition of plant in section 45-40 .
40-630(2A)
In applying paragraph (2)(b) to capital expenditure incurred by a * rural land irrigation water provider on a dam or structural improvement, the requirement in paragraph 45-40(1) (c) that the land on which the dam or structural improvement is situated be used for agricultural or pastoral operations is to be disregarded.
Exception: deduction available under Subdivision 40-F
40-630(2B)
A * rural land irrigation water provider cannot deduct an amount under this Subdivision for capital expenditure if the entity can deduct an amount for that expenditure under Subdivision 40-F .
Exception: deduction available under Subdivision 40-J
40-630(2C)
You cannot deduct an amount under this Subdivision for capital expenditure if any entity can deduct an amount for that expenditure for any income year under Subdivision 40-J .
Reduction of deduction
40-630(3)
You must reduce your deduction by a reasonable amount to reflect your use of the land in the income year after the time when you incurred the expenditure for a purpose other than the purpose of carrying on:
(a) a * primary production business; or
(b) a * business for the * purpose of producing assessable income from the use of rural land (except a business of * mining and quarrying operations).
40-630(4)
Subsection (3) does not apply to expenditure incurred by a * rural land irrigation water provider. Instead, a rural land irrigation water provider must reduce its deduction in relation to particular land by a reasonable amount to reflect an entity ' s use of the land in the income year after the rural land irrigation water provider incurred the expenditure for a purpose other than a * taxable purpose.
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