Commonwealth Numbered Acts

INCOME TAX ASSESSMENT ACT 1997 No. 38 of 1997 - SECT 40.30

(1) The table on the next page has a list of all the *capital allowances. It
gives you the following key information about each:
. what kind of expenditure qualifies for the allowance;
. who may deduct it;
. how long the write off period is;
. what happens when you dispose of the property.

(2) The table also shows where you can find the detailed provisions for each
of the allowances. The provisions of the Income Tax  Assessment Act 1997 are
identified in normal text. The other provisions, in bold, are provisions of
the Income Tax Assessment Act  1936 .

What expenditure qualifies?
Who may deduct?
Over how long?
Disposal of property: what happens?
For more detail, see ... Capital works: buildings, structural improvements,
environment protection earthworks and extensions, alterations or improvements
Capital construction costs of buildings, structural
improvements, environment protection earthworks and
extensions, alterations or improvements
Owners, some lessees and some holders of quasi-
ownership rights over land granted by an exempt
Australian government agency or an exempt foreign
government agency
25 years or 40 years or some period between
25 years and 40 years depending when the works
began and how you use the works
Destruction of capital works can give
rise to a balancing deduction
Division 43 Depreciation
Cost of plant or articles used (or installed ready for use) to
produce assessable income
Owners and some lessees
Effective life of plant or article
Balancing adjustment required
Section 54 Development allowance
Capital expenditure on certain kinds of plant and equipment
for use in very large development projects
Owners and lessees
Immediate 10% write off when a unit of
eligible property is first used for producing
assessable income or is installed ready for
such use
Deduction disallowed if property
disposed of within twelve months of
first income producing use
Subdivision B of Division 3
of Part III Drought investment allowance
Capital expenditure on certain kinds of structural
improvements and equipment for use in a primary production
business for the purpose of producing assessable income
Primary producers, and finance companies that lease
the improvements or equipment to primary producers
Immediate 10% write off when a unit of
property is first used in a primary production
business for producing assessable income or is
installed ready for such use
Deduction disallowed if property
disposed of within 12 months of first
use, and if property disposed of later
in accordance with intention formed
before first use
Part XII Electricity connections
Capital expenditure on connecting or upgrading mains
electricity facilities used or intended for use in a business
for producing assessable income on land in Australia
Any entity with an interest in the land
10 years
This is not applicable
Section 70A Environmental impact studies
Expenditure on study to evaluate the environmental impact of
an income producing project
Any entity with an income producing project
Lesser of 10 years or the estimated life of
the income producing project
This is not applicable
Subdivision C of Division 3
of Part III Environment protection
Expenditure incurred in dealing with pollution or waste
Any entity
Immediate 100% write off
This is not applicable
Subdivision CA of Division 3
of Part III Films, Australian
Capital expenditure contributed to the cost of producing an
Australian film
Any entity except partnerships (there are special
rules for partners)
Immediate 100% write off
Consideration for disposal of
copyright in the film is assessable
income
Division 10BA of Part III Grapevines
Expenditure on establishing a grapevine
Entity carrying on primary production business
4 years
Further deduction allowed if vine
destroyed
Section 75AA Horticultural plants
Expenditure on establishing a horticultural plant
Entity carrying on horticultural business
1 to 15 years, depending on effective life of
horticultural plant
Further deduction allowed if
horticultural plant destroyed
Division 10F of Part III Industrial property
Capital expenditure on acquiring a unit of industrial property
to produce assessable income
Any entity
Effective life (2 years to 25 years)
Balancing adjustment required
Division 10B of Part III Land degradation
Expenditure on certain activities to prevent degradation
of land
Entity who carries on a primary production business,
or a business on rural land except mining or quarrying
Immediate 100% write off
This is not applicable
Section 75D Mining and quarrying: exploration or prospecting
Expenditure on exploring or prospecting for minerals
Entity engaged in exploration or prospecting
Immediate 100% write off
Balancing adjustment required
Subdivision 330-A Mining and quarrying: development and operation of a mine or
quarry
Capital expenditure incurred in relation to mining or
quarrying operations
Entity carrying on or proposing to carry on mining
or quarrying operations
Mining operations: lesser of 10 years or
estimated life of mine
Quarrying operations: lesser of 20 years or
estimated life of quarry
Balancing adjustment required
Subdivision 330-C Mining and quarrying: transporting minerals or quarry
materials
Capital expenditure incurred in transporting minerals or
quarry materials
Entity in a transport business or entities carrying
on mining or quarrying operations
Minerals: 10 years
Quarry materials: 20 years
Starts in the year when transport begins
Balancing adjustment required
Subdivision 330-H Mining and quarrying: mine site rehabilitation
Expenditure incurred on rehabilitation of a mining site, or
associated site, to restore it to its pre-mining condition
Entity who has carried on mining, quarrying,
prospecting or associated activities
Immediate 100% write off
This is not applicable
Subdivision 330-I Research and development ("R&D")
1. Contracted expenditure for another agency to do research
for the company
2. Core technology expenditure for R&D
3. Expenditure on plant exclusively for R&D
4. Salary and certain other R&D expenditure
Australian companies engaging in R & D.
1. Immediate 150% write off
2. Immediate 100% write off
3. Write off 1/3 or 1/2 of expenditure.
Maximum period is 3 years
4. Expenditure more than $20,000: immediate
150% write off
1. This is not applicable
2. This is not applicable
3. Balancing adjustment required
4. This is not applicable
Section 73B Telephone lines
Capital expenditure on a telephone line on land on which a
business of primary production is carried on
Entity with an interest in the land
10 years
This is not applicable
Section 70 Timber mill buildings
Expenditure on buildings used for timber milling business, if
the buildings are in a forest or adjacent to a timber felling
area
Entity carrying on timber milling business
Lesser of 25 years or estimated life of
building
Balancing adjustment required
Subdivision B of Division 10A
of Part III Timber operations: access roads
Expenditure on access roads to area of timber operations
Entity carrying on timber operations
Lesser of 25 years or estimated life of road
Balancing adjustment required
Subdivision A of Division 10A
of Part III Water conservation
Expenditure on plant or structural improvements for conserving
or conveying water
Entity carrying on primary production business
3 years
This is not applicable
Section 75B