Repairs, insurance and replacement of plant and machinery determine whether business expenditure is revenue or capital in nature. Deduction is available for revenue expenditure on repairs, rent and insurance in relation to furniture, plant and machinery used for business or profession, including insurance premium for risk of damage or destruction and current repairs that are not capital in nature. Capital expenditure on repair is added to the cost of plant and machinery, while replacement of old machinery by new machinery is not allowable as revenue expenditure and depreciation applies instead. Replacement of worn out parts may be current expenditure, but replacement of an independent part of composite machinery may be capitalised.