Private ruling: Temporary full expensing - relocatable buildings characterised as chattels
Date of advice: 29 June 2021
Published: February 2022
Ruling period: 30 June 20XX
Date scheme commenced: 1 July 20YY

Ruling: Q1: Is the entity entitled to obtain temporary full expensing under Subdiv 40-BB: 86-804 of the Income Tax (Transitional Provisions ) Act 1997 (Cth) for the cost of the relocatable building on the basis that the relocatable buildings are a depreciable asset under s 40-30 of the Income Tax Assessment Act 1997 (Cth)? | A1: Yes. In accordance with Tax Determination 97/24 at paragraph 4, the relocatable buildings are a chattel as they will 'merely rest' on the leased building and are affixed in such a way to facilitate easy addition, removal and relocation. Furthermore, the fact that the relocatable buildings shall remain in the same place for a 'substantial period of time' will not preclude it being a chattel.

Relevant facts and circumstances: The entity leases two buildings at the Property. One building contains an office and a workshop, while the second building only contains a vacant amenities area with a vacant floor area of XXXm 2 . The entity intends on placing relocatable buildings ('modules') inside the second building. This will allow for additional workshop capacity without needing to make significant modification to the leased building. The modules will be purely used to produce assessable income. The modules are designed to facilitate easy addition, removal and relocation. They will either be manufactured offsite and will be delivered via a crane or a truck, or alternatively, the components will be delivered to delivered to the Property and be assembled on-site. Each module will rest on the ground of the Property, with the electrical power provided by a plug and socket and will not be connected to the plumbing or any other services. All modules will be fitted with doors, windows, floor coverings, lights, power outlets and an air conditioner.

Relevant legislative provisions: Income Tax (Transitional Provisions ) Act 1997 (Cth) Section 86-804 | Income Tax Assessment Act 1997 (Cth) Section 40-30