Blackhole expenditures are expenses relating to a business carried on for taxable purposes, which cannot be deducted under any other provision of the tax law. They can arise in a variety of situations, including the establishment or cessation of a business, the termination of a lease, and more. For taxpayers, the inability to deduct these expenses can result in a significant tax burden and reduce the profitability of their operations.
Fortunately, the Australian Taxation Office (ATO) provides guidance on the deductibility of certain blackhole expenditures. Keep reading to find out what blackhole expenditures are, when they are deductible, and how to claim deductions for these expenses correctly.