Commentary

C2.902 Limitation on allowable expenditure

Capital gains tax
Capital gains tax | Commentary

C2.902 Limitation on allowable expenditure

Capital gains tax | Commentary

C2.902 Limitation on allowable expenditure

On the disposal of a wasting asset, the full amount of the allowable expenditure in respect of the asset is not deductible but is restricted. For this purpose, it is assumed that:

  1.  

    (a)     the original cost of the asset, after deduction of the residual or scrap value, is written off at a uniform rate over its predictable life1, and

  2.  

    (b)     any expenditure on enhancement of the value of the asset2, or in respect of preserving or defending the owner's title to it3, is written off at a uniform rate over the period from the date

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