Document ID: chunk:federal_register_of_legislation:C2025C00029:section:3:p17
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 3 (pt 17/54)
Character Range: 1128921–1131825

capital works is only eligible for a deduction under this Division if there is a construction expenditure area for the capital works. The area defined as the construction expenditure area may comprise the whole of the capital works or only part of them.
  Whether there is a construction expenditure area for capital works and how it is identified depends on the following factors:
              * the type of expenditure incurred;
              * the time when the capital works began;
              * the area of the capital works that is to be owned, leased or held by the entity that incurred the expenditure;
              * for capital works begun before 1 July 1997, the area of the capital works that was to be used in a particular manner.
  A pool of construction expenditure is that part of an amount of construction expenditure that is attributable to a particular construction expenditure area.

Operative provisions

43‑70  What is construction expenditure?
 (1) Construction expenditure is capital expenditure incurred in respect of the construction of capital works.
 (2) Construction expenditure does not include:
 (a) expenditure on acquiring land; or
 (b) expenditure on demolishing existing structures; or
 (c) expenditure on clearing, levelling, filling, draining or otherwise preparing the construction site prior to carrying out excavation works; or
 (d) expenditure on landscaping; or
 (e) expenditure on *plant; or
 (f) expenditure on property for which a deduction is allowable, or would be allowable if the property were for use for the *purpose of producing assessable income, under:
 (i) Subdivision 40‑F (about primary production depreciating assets), Subdivision 40‑G (about capital expenditure of primary producers and other landholders), Subdivision 40‑H (about capital expenditure that is immediately deductible) or Subdivision 40‑I (about capital expenditure that is deductible over time); or
 (ii) the former Division 330 of this Act or the former Division 10, 10AAA or 10AA of Part III of the Income Tax Assessment Act 1936 (all of which dealt with mining and/or quarrying); or
 (iii) section 73A of the Income Tax Assessment Act 1936 (about expenditure on scientific research); or
 (iv) the former Subdivision 387‑A of this Act or the former section 75D of the Income Tax Assessment Act 1936 (both of which allowed deductions for capital expenditure to prevent land degradation); or
 (v) the former Subdivision 387‑B of this Act or the former section 75B of the Income Tax Assessment Act 1936 (both of which allowed deductions for capital expenditure on facilities to conserve or convey water); or
 (vi) the former Subdivision 387‑G of this Act or the former section 124F or 124JA of the Income Tax Assessment Act 1936 (all of which allowed deductions for capital expenditure on forestry roads and/or timber mill buildings); or
 (fa) any of these kinds of expenditure