Capital vs Revenue - Deductions Perspective

Learn to categorise deductions as being on either capital or revenue account.

This session covers:

• An overview of allowable deductions

• General deductions under section 8-1

  • Meaning of “to the extent that”

  • Meaning of “incurred”

  • Meaning of “in gaining or producing assessable income”

  • Meaning of “in carrying on a business for the purpose of gaining or producing assessable income”

  • Negative limb - Capital expenditure not deductible

• Specific expenditure

  • Expenses to increase sales, expand business, takeover defence costs

  • Trading stock

  • Demolition costs

  • Lease, hire, rental payments

  • Labour costs relating to construction or creation of capital assets

  • List of examples of capital expenditure

  • List of examples of non-capital expenditure

• Case studies

  • Commissioner v Sharpcan Pty Ltd (2019)

  • Bowerman v Commissioner (2023)

Date recorded: 23 January 2024