INCOME TAX ASSESSMENT ACT 1997 - SECT 40.630 Landcare operations

INCOME TAX ASSESSMENT ACT 1997 - SECT 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:

(a)   if section   250 - 150 applies--you are taken not to be using the land for the purpose of carrying on a primary production business, or a business for the purpose of producing assessable income from the use of rural land (except a business of mining and quarrying operations), to the extent specified under subsection   250 - 150(3); or

(b)   otherwise--you are taken not to be using the land for such a purpose.

  (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.

  (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

  (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.

  (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

  (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

  (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

  (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).

  (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.