Expenditure incurred in purchasing trading stock is

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Expenditure incurred in purchasing trading stock is an outgoing necessarily  incurred in carrying on a business (deductible under s 8-1) Trading stock deemed not to be of a capital nature (s 70-25) Trading stock “on hand” Trading stock “on hand” Expenditure incurred in purchasing trading stock is deductible in the year it  becomes “on hand” For trading stock to be “on hand”: Taxpayer must have the power to dispose of the trading stock Taxpayer need not necessarily have legal ownership of the trading stock  Taxpayer need not necessarily have physical possession of the trading stock Interaction with CGT and Interaction with CGT and     depreciation rules depreciation rules Capital gains and losses made in relation to trading stock are disregarded for CGT  purposes Trading stock is not a “depreciating asset” and therefore its cost cannot be written- off under the capital allowance regime Accounting for trading Accounting for trading     stock stock Taxpayers must compare the value of their trading stock on hand at the start of the  income year with their trading stock on hand at the end of the income year
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Valuing trading stock Valuing trading stock
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