Deductions for Vacant Land: Under S.26-102(1) and S.26-102(2), deductions for holding costs related to vacant land won't be denied if the land is used or available for use in carrying on a business by:
- The taxpayer who owns the land.
- The taxpayer's spouse or children under 18.
- An 'affiliate' of the taxpayer, meaning someone who acts according to the taxpayer's direction or in concert with them.
- An entity 'connected with' the taxpayer, where one controls the other or they're both controlled by the same third entity.
Partly Used for Business: If the land is partly used for business and partly for another purpose, deductions must be apportioned. Only holding costs related to the part not used for business may be non-deductible.
Future Use in Current Business: The 'carrying on a business' exception applies not only to land actively used in a business but also to land available for business purposes. For example, vacant land held for future use in a farming business qualifies as 'available for use' in the business.
Continued Deductions after Business Ceases: For a previous business asset, holding costs remain deductible after the business ceases as long as the land was used in the business at the time it ceased.
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- The New 'Vacant Land' Rule (1)
- The New ‘Vacant Land’ Rule (2) – ‘Substantial and Permanent Structure’
- The New ‘Vacant Land’ Rule (3) – ‘In Use or Available for Use’
- The ‘Vacant Land’ Exclusions (2) – The ‘Carrying on (any) Business’ Exception (2)
- The ‘Vacant Land’ Exclusions (3) – ‘Primary Producer’ and ‘Exceptional Circumstances’ Exceptions
