25‑110 Capital expenditure to terminate 25‑110 Capital expenditure to terminate lease etc.

#### 25‑110 Capital expenditure to terminate lease etc. (1) You can deduct an amount for capital expenditure you incur to terminate a lease or licence (including an authority, permit or quota) that results in the termination of the lease or licence if the expenditure is incurred: (a) in the course of carrying on a \*business; or (b) in connection with ceasing to carry on a business. (2) The amount you can deduct is 20% of the expenditure: (a) for the income year in which the lease or licence is terminated; and (b) for each of the next 4 income years. Exceptions (3) You cannot deduct any amount for expenditure you incur to terminate a lease that, in accordance with \*accounting standards, or statements of accounting concepts made by the Australian Accounting Standards Board, is classified as a finance lease. (4) If you incurred the expenditure under an \*arrangement and: (a) there is at least one other party to the arrangement with whom you did not deal at \*arm’s length; and (b) apart from this subsection, the amount of the expenditure would be more than the \*market value of what it was for (assuming the termination did not occur and was never proposed to occur); the amount of expenditure you take into account is that market value. (5) You cannot deduct any amount for expenditure you incur to terminate a lease or licence if: (a) after the termination, you or an \*associate of yours enters into another lease or licence with the same party or an associate of that party; and (b) the other lease or licence is of the same kind as the original one. (6) You cannot deduct any amount for expenditure you incur to terminate a lease or licence to the extent that the expenditure is for the granting or receipt of another lease or licence in relation to the asset that was the subject of the original lease or licence.