Document ID: chunk:federal_register_of_legislation:C2004A00684:clause:2_82kzme:p1
Version: federal_register_of_legislation:C2004A00684
Segment Type: clause
Provision Reference: sch 2 cl 82KZME (pt 1/2)
Character Range: 17469–20246

82KZME  Expenditure with eligible service period ending up to 13 months later under some agreements

 (1) Section 82KZMF applies to set the amount and timing of deductions for expenditure that a taxpayer incurs in a year of income (the expenditure year) if:
 (a) apart from sections 82KZMB, 82KZMC and 82KZMF, the taxpayer could deduct the expenditure under section 8‑1 of the Income Tax Assessment Act 1997 for the expenditure year; and
 (b) the eligible service period for the expenditure ends not more than 13 months after the taxpayer incurs the expenditure; and
 (c) the requirements of subsections (2) and (3) are met.

Note 1: Subsection 82KZL(1) explains what the eligible service period for expenditure is.

Note 2: There are some exceptions: see subsections (5), (6), (7), (8) and (9).

Note 3: If section 82KZMF applies to the expenditure, sections 82KZMB and 82KZMC do not: see subsection 82KZMF(3).

General requirements for expenditure

 (2) The expenditure must be incurred:
 (a) after 1 pm (by legal time in the Australian Capital Territory) on 11 November 1999 under an agreement; and
 (b) in return for the doing of a thing under the agreement that is not to be wholly done within the expenditure year.

Requirements for agreement

 (3) There are these requirements for the agreement:
 (a) the taxpayer's allowable deductions for the expenditure year that are attributable to the agreement must exceed the taxpayer's assessable income (if any) for the expenditure year that is attributable to the agreement; and
 (b) the taxpayer does not have day to day control over the operation of the agreement (whether or not the taxpayer has the right to be consulted or give directions); and
 (c) at least one of these must be satisfied:
 (i) there is more than one participant in the agreement in the same capacity as the taxpayer;
 (ii) the person who manages, arranges or promotes the agreement, or an associate of that person, manages, arranges or promotes similar agreements for other taxpayers.

Activities that relate to the agreement

 (4) Without affecting the operation of any other section in this Subdivision, an agreement referred to in this section includes all activities that relate to the agreement, including those that give rise to deductions or assessable income.

Exception 1: certain negatively geared investments

 (5) The expenditure must not be:
 (a) a premium for building insurance, contents insurance or rent protection insurance; or
 (b) interest on money borrowed to acquire:
 (i) real property or an interest in real property; or
 (ii) shares that are listed for quotation in the official list of an approved stock exchange; or
 (iii) units in a trust that has at least 300 beneficiaries and is a widely held unit trust as defined in