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If your capital expenditure is directly connected with your project which is a continuing activity rather than less-active investment like rental property, then you may able to claim a deduction for capital expenditure allocated to a project pool. You can also allocate certain capital expenditure to a project pool and write it off over the 'project life' that incurred after 30 June 2001.

You can claim this deduction:

  • If you operated the project in 2015-16 for a taxable purpose (i.e. for producing assessable income);
  •  If abandoned, sold or otherwise disposed before or after it started to operate. You cannot claim a deduction -
  • If it is a private or domestic expenditure;
  • If the expenditure of the project is directly connected to carry on a business.

You are able to claim a deduction from your capital expenditure from the very first year of your
project. After estimating the project life in years, including fractions of years, you can claim deduction for that year. That means if you start operating your project in 2015–16 income years, a deduction is available for you from that year.  

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