Document ID: chunk:federal_register_of_legislation:C2004C00927:clause:1_4:p1
Version: federal_register_of_legislation:C2004C00927
Segment Type: clause
Provision Reference: sch 1 cl 4 (pt 1/8)
Character Range: 53719–56601

4  Before Division 26
Insert:

Division 25—Some amounts you can deduct

Guide to Division 25

25-1  What this Division is about

      This Division sets out some amounts you can deduct. Remember that the general rules about deductions in Division 8 (which is about general deductions) apply to this Division.

Table of sections

Operative provisions

25-5 Tax-related expenses
25-10 Repairs
25-15 Amount paid for lease obligation to repair
25-20 Lease document expenses
25-25 Borrowing expenses
25-30 Expenses of discharging a mortgage
25-35 Bad debts
25-40 Loss from profit-making undertaking or plan
25-45 Loss by theft etc.
25-50 Payments of pensions, gratuities or retiring allowances
25-55 Payments to associations
25-60 Parliament election expenses
25-70 Deduction for election expenses does not extend to entertainment
25-75 Rates and land taxes on premises used to produce mutual receipts

Operative provisions

25-5  Tax-related expenses

 (1) You can deduct expenditure you incur to the extent that it is for:
 (a) managing your *tax affairs; or
 (b) complying with an obligation imposed on you by a *Commonwealth law, insofar as that obligation relates to the *tax affairs of an entity; or
 (c) interest under section 170AA (Underpayment of tax) or 207A (Late payment of tax) of the Income Tax Assessment Act 1936.

Note: To find out whether a trustee of a deceased estate can deduct expenditure under this section, see subsection 69(7) of the Income Tax Assessment Act 1936.

No deduction for certain expenditure

 (2) You cannot deduct under subsection (1):
 (a) *tax; or
 (b) an amount payable under Part VI (Collection and recovery of tax) of the Income Tax Assessment Act 1936; or
 (c) expenditure for borrowing money (including payments of interest) to pay an amount covered by paragraph (a) or (b); or
 (d) expenditure for a matter relating to the commission (or possible commission) of an offence against an *Australian law or a *foreign law; or
 (e) a fee or commission for advice about the operation of a *Commonwealth law relating to taxation, unless that advice is provided by a *recognised tax adviser.

No deduction for expenditure excluded from general deductions

 (3) You cannot deduct expenditure under subsection (1) to the extent that a provision of this Act (except section 8-1) expressly prevents or limits your deducting it under section 8-1 (about general deductions). It does not matter whether the provision specifically refers to section 8-1.

No deduction for capital expenditure

 (4) You cannot deduct capital expenditure under subsection (1). However, for this purpose, expenditure is not capital expenditure merely because the *tax affairs concerned relate to matters of a capital nature.

Example: Under this section, you can deduct expenditure you incur in applying for a private ruling on whether you can depreciate an item of