Private ruling: Interpretation of section 110-25 of the Income Tax Assessment Act 1997
Published: March 2012
Date scheme commenced: February 2012

Ruling: Q1: Will section 110-25 of the Income Tax Assessment Act 1997 (ITAA 1997) apply to a payment such that the amount will be included in the cost base of the relevant asset? | A1: Yes

Relevant facts and circumstances: An entity makes a capital payment that increases value of a relevant asset.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 110-25.

Reasons for decision: Summary: Based on the facts, the requirements of subsection 110-25(5) are satisfied as the expected effect of the expenditure is to increase or preserve the value of the asset.

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