Document ID: chunk:federal_register_of_legislation:C2025C00029:section:6:p5
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 6 (pt 5/24)
Character Range: 1038734–1041561

businesses of *mining and quarrying operations) using rural land in Australia.

Exception: plant
 (2) However, you cannot deduct an amount under this Subdivision for capital expenditure on *plant, except:
 (a) a fence erected for a purpose described in paragraph 40‑635(1)(a) or (b); or
 (b) a dam or structural improvement (except a fence) covered by paragraph (1)(c), (d), (e) or (f) of the definition of plant in section 45‑40.
 (2A) In applying paragraph (2)(b) to capital expenditure incurred by a *rural land irrigation water provider on a dam or structural improvement, the requirement in paragraph 45‑40(1)(c) that the land on which the dam or structural improvement is situated be used for agricultural or pastoral operations is to be disregarded.

Exception: deduction available under Subdivision 40‑F
 (2B) A *rural land irrigation water provider cannot deduct an amount under this Subdivision for capital expenditure if the entity can deduct an amount for that expenditure under Subdivision 40‑F.

Exception: deduction available under Subdivision 40‑J
 (2C) You cannot deduct an amount under this Subdivision for capital expenditure if any entity can deduct an amount for that expenditure for any income year under Subdivision 40‑J.

Reduction of deduction
 (3) You must reduce your deduction by a reasonable amount to reflect your use of the land in the income year after the time when you incurred the expenditure for a purpose other than the purpose of carrying on:
 (a) a *primary production business; or
 (b) a *business for the *purpose of producing assessable income from the use of rural land (except a business of *mining and quarrying operations).
 (4) Subsection (3) does not apply to expenditure incurred by a *rural land irrigation water provider. Instead, a rural land irrigation water provider must reduce its deduction in relation to particular land by a reasonable amount to reflect an entity's use of the land in the income year after the rural land irrigation water provider incurred the expenditure for a purpose other than a *taxable purpose.

40‑635  Meaning of landcare operation
 (1) Landcare operation for land means:
 (a) erecting a fence to separate different land classes on the land in accordance with an *approved management plan for the land; or
 (b) erecting a fence on the land primarily and principally for the purpose of excluding animals from an area affected by land degradation:
 (i) to prevent or limit extension or worsening of land degradation in the area; and
 (ii) to help reclaim the area; or
 (c) constructing a levee or a similar improvement on the land; or
 (d) constructing drainage works on the land primarily and principally for the purpose of controlling salinity or assisting in drainage control; or
 (e) an operation primarily and principally for the purpose of: