Document ID: chunk:federal_register_of_legislation:C2025C00029:section:3:p12
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 3 (pt 12/54)
Character Range: 1116121–1119045

Table of Subdivisions
 Guide to Division 43
43‑A Key operative provisions
43‑B Establishing the deduction base
43‑C Your area and your construction expenditure
43‑D Deductible uses of capital works
43‑E Special rules about uses
43‑F Calculation of deduction
43‑G Undeducted construction expenditure
43‑H Balancing deduction on destruction of capital works

Guide to Division 43

43‑1  What this Division is about

      You can deduct certain capital expenditure on assessable income producing buildings and other capital works. This Division sets out the rules for working out those deductions.

Table of sections
43‑2 Key concepts used in this Division

43‑2  Key concepts used in this Division
  The following graphic introduces the key concepts used in this Division and shows the relationships between them.

Subdivision 43‑A—Key operative provisions

Guide to Subdivision 43‑A

43‑5  What this Subdivision is about

      This Subdivision contains the key operative provisions for this Division, including all of the deduction entitlement provisions. You should read all of this Subdivision to understand how this Division works.

Table of sections

Operative provisions
43‑10 Deductions for capital works
43‑15 Amount you can deduct
43‑20 Capital works to which this Division applies
43‑25 Rate of deduction
43‑30 No deduction until construction is complete
43‑35 Requirement for registration under the Industry Research and Development Act
43‑40 Deduction for destruction of capital works
43‑45 Certain anti‑avoidance provisions
43‑50 Links and signposts to other parts of the Act
43‑55 Anti‑avoidance—arrangement etc. with tax‑exempt entity

Operative provisions

43‑10  Deductions for capital works
 (1) You can deduct an amount for capital works for an income year.
 (2) You can only deduct the amount if:
 (a) the capital works have a *construction expenditure area; and
 (b) there is a *pool of construction expenditure for that area; and
 (c) you use *your area in the income year in the way set out in Table 43‑140 (Current year use).
Note 1: The deduction is limited to capital works to which this Division applies, see section 43‑20.
Note 2: Amongst other things, the definition of your area ensures that only owners and certain lessees of capital works, and certain holders of quasi‑ownership rights over land on which capital works are constructed, can deduct an amount under this Division.

43‑15  Amount you can deduct
 (1) The amount you can deduct is a portion of *your construction expenditure. However, it cannot exceed the amount of *undeducted construction expenditure for *your area.
Note: The limit in this subsection has 2 effects:
• It ensures that not more than 100% of your construction expenditure can be deducted.
• It imposes a time limit on the period over which your construction expenditure can be deducted. For capital works begun before 27 February 1992, that period will be 25 years