Expenditure incurred by an SME for repairs to its premises, part of premises or a depreciating asset (including plant) held or used solely for the purpose of producing assessable income is deductible.
Some care is needed however, because the word "repair" is not defined in the tax law and therefore takes its ordinary meaning of restoration by renewal or replacement of subsidiary parts of a whole.
So, the essential question is whether the particular work is the renewal or replacement of defective parts or the renewal or replacement of substantially the whole of the asset.
Where the asset repaired is only partly used for income-producing purposes, the cost of any repairs has to be apportioned between the income-producing and non-income-producing uses of the asset.
Initial repairs to a newly acquired asset, the replacement of the entire item and improvements are not deductible, but may qualify for a periodic write-off under the capital allowance provisions.