Digging for gold in black holes: Black hole expenditure - what's fixed and what isn't? presentation

Published on 06 Oct 06 by VICTORIAN DIVISION, THE TAX INSTITUTE

“The Lord giveth and the Lord taketh away”. He’s not the only one. The welcome reform of the provisions for deductibility of expenditure otherwise unrecognised in the tax system (so-called “black hole expenditure”) was accompanied by an expansion of the rules defining amounts included in the CGT cost base, thus making those amounts non-deductible under the black hole rules. This presentation discusses that feature of the reform, including:

• identifying “capital expenditure”, especially in start up contexts
• the meaning of “in relation to” the relevant “business”, for example, in a business acquisition context
• what expenditure on someone else’s business will be deductible.

Author profile

Tim Neilson CTA-Life

Prior to joining White & Case, Tim was a Special Counsel at Greenwoods & Herbert Smith Freehills Pty Limited in Melbourne. Tim is a legal practitioner who practices primarily in the area of income tax and capital gains tax, generally for “large business and international” type clients, mainly in financing, major projects and M&A. He is a former State Chairman and current National Councillor of The Tax Institute, and is immediate past President of the Institute. He has published frequently in professional journals and spoken at professional organisation conferences and seminars and guest lectures in the University of Melbourne’s Masters of Laws program. - Current at 06 November 2020

More by Tim NEILSON

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• President's report: “… and teach his senators wisdom” - 01-May-2019
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• President's report: “Reform? Aren’t things bad enough already?” - 01-March-2019
• President's report: Serving our members and the tax community - 01-February-2019
• Effect of share premium account on continuity of ownership test analysis - 01-August-2018
• Inbound investment - Source: Why and when it matters, and where is it? paper - 06-October-2011
• Referability not referenced: divergent cases on timing of deductions - 01-October-2010
• A current controversy and “the rule of law” - 01-October-2009
• Corporate distributions and capital management issues paper - 11-October-2007
• Digging for gold in black holes: black hole expenditure - what's fixed and what isn't? paper - 06-October-2006
• Tax Case: The other side of midnight - 01-April-2004
• International Taxation Workshop - 27-October-1999

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