INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART III - LIABILITY TO TAXATION  

Division 10F - Deduction for capital expenditure incurred in establishing horticultural plants  

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Subdivision A - Simplified outline  

SECTION 124ZZE  

124ZZE   SIMPLIFIED OUTLINE  
The following is a simplified outline of this Division:

  • • A taxpayer can get a deduction for capital expenditure ( establishment expenditure ) incurred in establishing a horticultural plant, so long as:
  • (a) the taxpayer owns the plant; and
  • (b) the taxpayer uses the plant for the purpose of producing assessable income; and
  • (c) the taxpayer uses the plant in a business of horticulture; and
  • (d) the expenditure is not otherwise deductible; and
  • (e) the expenditure is incurred on or after 10 May 1995.
  • • A taxpayer can get a deduction for the establishment expenditure even if it was incurred by a previous owner of the plant.
  • • If the effective life of a plant is less than 3 years, a taxpayer can get a deduction for 100% of the establishment expenditure in the year when the plant is first used:
  • (a) for the purpose of producing assessable income; and
  • (b) in a business of horticulture.
  • • If the effective life of a plant is 3 or more years, a taxpayer can get an annual deduction for the establishment expenditure, worked out on a prime cost basis. The deduction is available only during the plant's maximum write-off period .
  • • A taxpayer can get a special deduction if a plant with an effective life of 3 or more years is destroyed before the end of the plant's maximum write-off period.
  • • A taxpayer cannot get a deduction for recouped expenditure.
  • • If the ownership of a plant is transferred, the transferor may be required to give the transferee information that will help the transferee calculate his or her deduction.
  • 124ZZF. When can a taxpayer get a 100% deduction for establishment expenditure?
  • 124ZZG. When can a taxpayer get an annual deduction for establishment expenditure?
  • 124ZZH. How much can be deducted each year?
  • 124ZZI. What is the annual write-off rate and the maximum write-off period?
  • 124ZZJ. What counts as establishment expenditure for a plant?
  • 124ZZK. What is the effective life of a plant?
  • 124ZZL. Commissioner may make determination specifying effective lives of plants
  • 124ZZM. Special deduction for destruction of plants
  • 124ZZN. No deduction if expenditure recouped
  • 124ZZO. Transfer of ownership of plants - transferor to give tax information to transferee
  • 124ZZP. Section 124ZZO obligations - treatment of partnerships
  • 124ZZQ. Owner includes lessee or licensee
  • 124ZZR. Definitions
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