Document ID: chunk:federal_register_of_legislation:C2004C00927:clause:1_3:p12
Version: federal_register_of_legislation:C2004C00927
Segment Type: clause
Provision Reference: sch 1 cl 3 (pt 12/24)
Character Range: 440361–443245

a *water facility include a dam, earth tank, underground tank, concrete tank, metal tank, tank stand, bore, well, irrigation channel (or similar improvement), pipe, pump, water tower or windmill.

Limits on deductions

387‑135  Reduced deduction for certain uses of water facility

  Your deduction for expenditure relating to a *water facility is reduced to a reasonable amount if the facility:
 (a) was not wholly for use in carrying on a *primary production business on land in Australia; or
 (b) was not wholly for use for the *purpose of producing assessable income.

387‑140  No deduction for acquisition of water facility if anyone can deduct certain earlier expenditure on the facility

 (1) You cannot deduct an amount for any income year for capital expenditure on the acquisition of a *water facility if any person has deducted or can deduct an amount under this Subdivision for any income year for earlier capital expenditure on:
 (a) the construction or manufacture of the facility; or
 (b) a previous acquisition of the facility.

Note: Treat expenditure covered by section 75A or 75B of the Income Tax Assessment Act 1936 as if it had been deducted under this Subdivision. See section 387‑140 of the Income Tax (Transitional Provisions) Act 1997.

 (2) A *water facility and an alteration, addition or extension to that facility are not the same water facility for the purposes of subsection (1).

387-145  Application of Common rule 2

  Subdivision 41-B (which sets out Common rule 2 dealing with non-arm's length transactions) applies to expenditure for which you can deduct an amount under this Subdivision. However, subsection 41‑65(2) (about disposal of property) does not apply.

Partnerships

387‑150  How this Subdivision applies to partners and partnerships

Application

 (1) This section applies to allocate expenditure to you for the purposes of this Subdivision if you were a partner in a partnership when it incurred capital expenditure during an income year.

Allocation of partnership expenditure to partners

 (2) For the purposes of this Subdivision, you are taken to have incurred during that income year:
 (a) the amount of the expenditure that the partners agreed you should bear; or
 (b) if there was no such agreement—the proportion of the expenditure equal to the proportion of your individual interest in the net income or partnership loss of the partnership for that income year.

This Subdivision does not apply to net income or partnership loss

 (3) Disregard this Subdivision when working out the net income or partnership loss of the partnership under section 90 of the Income Tax Assessment Act 1936.

[The next Subdivision is Subdivision 387‑D.]

Subdivision 387‑D—Establishing grapevines

387‑300  What this Subdivision is about

      You can deduct expenditure on establishing a grapevine that you own and use in a primary