Does the mutuality principle apply to the Tax Break?
Whether a mutual association will be able to claim the Tax Break will depend on its particular situation. For example, whether a mutual association is carrying on a business is a matter of fact and circumstance. However, if the association can satisfy all of the eligibility criteria then they can claim the Tax Break. For example, if the association is able to claim a deduction in relation to the asset under Subdivision 40-B (that is, it uses the asset to produce assessable income) it may be eligible for the Tax Break. The ATO can assist you with understanding whether or not you or your association are carrying on a business and with understanding more about the uniform capital allowance regime in Division 40 (see www.ato.gov.au). Legislation: Schedule 1, item 4, section 41-10 Explanatory memorandum: Paragraphs 1.61-1.
