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DO 9: Meaning of replaced area fraction
or “How to calculate the percentage of your horticultural plot that's been replanted or regrafted”
You could also call this:

“How to calculate the remaining value of land improvement costs you can claim”

When you spend money on certain improvements to land or on environmental work, you can claim some of this cost back over time. This is called ‘diminished value’. To figure out the diminished value for a year, you use a simple sum:

You start with the amount you spent. Then you add any money you’ve made from environmental restoration work related to this spending. Finally, you subtract any deductions you’ve already claimed for this spending in previous years or in the current year (except for some specific deductions).

The result of this sum is your ‘diminished value’ for the year. This applies to various types of land improvements and environmental work, such as avoiding, remedying, or mitigating effects of discharge of contaminant or making of noise, improvements to farmland, planting or maintaining trees for farming or forestry, and other similar activities.

Remember, you can only include deductions you’ve claimed under this tax law or earlier tax laws. Also, for the current year, you don’t include certain specific deductions when doing this calculation.

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Next up: DO 10: Farming or horticulture expenditure of lessor or sublessor

or “Deductions for land improvements when renting to farmers”
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Part D Deductions
Farming and aquacultural business expenditure

DO 9BMeaning of diminished value

  1. In section DB 46 (Avoiding, remedying, or mitigating effects of discharge of contaminant or making of noise), sections DO 4, DO 5, DO 11, DO 12, DO 13, DP 3, DP 4, DZ 17, DZ 18, and schedule 20 (which relate to improvements to land and aquacultural business), diminished value, for an income year, means the amount calculated using the formula—

    amount of expenditure + income derived − deductions allowed.

    Where:

    • In the formula in subsection (1),—

    • amount of expenditure is the amount of expenditure incurred—
      1. on an improvement described in section DO 4, DO 5, DO 12, or DP 3:
        1. of a type described in section DB 46:
        2. income derived is the total amount of income derived under section CB 28(8) (Environmental restoration accounts) in relation to the expenditure:
          1. deductions allowed is the total amount allowed as a deduction for the expenditure to any person—
            1. in any earlier income years under this Act or an earlier Act:
              1. in the income year under this Act, except an amount allowed in the income year under section DB 46, DO 4, DO 5, DO 6, DO 12, or DP 3.

              Notes
              • Section DO 9B: inserted (with effect on 1 April 2008), on , by section 49(1) (and see section 49(2) for application) of the Taxation (Annual Rates for 2023–24, Multinational Tax, and Remedial Matters) Act 2024 (2024 No 11).