Private ruling: Temporary full expensing - artwork
Date of advice: 17 May 2023
Published: 3 July 2023
Ruling period: Income year ended 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Is the artwork a depreciating assetas defined in section 40-30 of the Income Tax Assessment Act 1997 (ITAA 1997)? | A1: Yes, the artwork is a depreciating asset as defined in section 40-30 of the ITAA 1997. As outlined in Taxation Ruling TR 2021/3 Income tax: effective life of depreciating assets (applicable for income year ended 30 June 2022) "Artworks qualifying as depreciating assets (restricted to works of art and reproductions of artwork that are tangible in nature, such as paintings, sculptures, drawings, engravings and photographs, that are displayed in open viewing areas in premises used for taxable purposes including reception areas, waiting rooms and foyers)". Your artwork meets this definition. | Q2: Are you entitled to claim the entire purchase price of the artwork under the temporary full expensing (TFE) measures in subsection 40-160(1) of the Income Tax (transitional provisions) Act 1997 (IT(TP)A) for income year ended 30 June 20XX? | A2: Yes, you meet the requirements of subsection 40-160(1) of the IT(TP)A for income year ended 30 June 20XX as you acquired and installed the artwork in June 20XX, which is after 2020 budget time and prior to 30 June 20XX; you are a small business entity as defined in Subdivision 328-C of the ITAA 1997 (so income is under $5 billion) and no balancing adjustment event has occurred to the artwork in the income year ended 30 June 20XX.

Relevant facts and circumstances: You are a private company that runs a business. You operate from offices in a capital city CBD. The branding of the business requires a high standard of decor. During the 2022 financial year, you acquired an original painting (artwork) for display in your office. Your annual turnover for the year ended 30 June 20XX was under $X million. The artwork was acquired, installed and ready for use prior to 30 June 20XX. The artwork is displayed in a common open viewing area of your business premises.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 40-30 | Income Tax (transitional provisions) Act 1997 subsection 40-160(1)