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Can a reasonable estimate of the value of the time spent by an individual taxpayer in developing in-house software constitute 'expenditure' the taxpayer may choose to allocate to a software development pool under subsection 40-450(1) of the Income Tax Assessment Act 1997 (ITAA 1997)?

No. The value of the taxpayer's time spent in developing computer software is not an amount of 'expenditure' and it cannot be allocated to a software development pool.

The taxpayer, an individual, did not incur any expenditure but spent many hours in developing in-house software. The taxpayer valued the time they took to develop the in-house software for the purpose of allocating that value to a software development pool and claiming a deduction in relation to the amount under section 40-455 of the ITAA 1997.

The value of the time taken by a taxpayer to develop computer software is not an amount of expenditure and cannot be allocated to a software development pool.