about t/r 2019

 Author: AriATO(Community Support)Community Support

1 Aug 2022

Hi @punitshah

This response replaces all our previous ones so there's no confusion as there's a lot of back n forth.

In order to be eligible to claim TFE for an asset, you must be carrying on a business, have an aggregated turnover of less than $5 billion and the asset must meet the eligibility criteria. See our website about TFE

For all entity types, including companies, to be eligible to claim a TFE deduction the entity must carry on a business in addition to meeting the other eligibility criteria for the TFE deductions including that the asset in question is used for a taxable purpose.

For companies covered by TR 2019/1, as referred to in LCR 2021/3, the same indicia of business that are relevant for other forms in which an activity may be conducted such as individuals, trusts and partnership are still relevant. However for a company to whom TR 2019/1 applies there is a rebuttable presumption that it intends to and does in fact carry on a business if the company aims to make, and has a prospect of profit, and these companies will ordinarily carry on a business. However, that is not always the case, and the indicia, will assist in determining whether the presumption arises in any given circumstance, and if it does, whether it is rebutted on the facts. 

We are unable in this forum to answer whether the company in question is carrying on a business or whether it would be eligible to claim a TFE deduction for an asset it holds as we would require further information. If you need advice on these issues you should seek tailored technical assistance which can include a proivate ruling.