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In finding that the rent prepayments were capital expenditures, so that such deduction was not permitted, Jagot J stated: [T]he payments … were … a one off, lump sum, non-refundable payment made to secure an enduring advantage (the right to pay the lesser percentage rent) for the term of the [leases] and most likely the term of any renewal of the [leases]. ... As a matter of substance the payments, although called the prepayment of rent, did not involve the payment of rent at all. … … What [the trust] acquired through the payments was a business with a different structure, a business in which the percentage rent payable was permanently reduced …. … The non-refundable nature of the payments suggests that they were not made to secure the right to occupy the premises under the lease and, rather, were capital in nature. ... Summary of Mussalli v Commissioner of Taxation [2020] FCA 544 under s. 18(1)(b) – Capital expenditure v. expense – Contract purchases or prepayments. ...