Holder changes but user same or associate of former user
This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.
End of attention
If you become the holder of plant on or after 9 May 2001 or another depreciating asset after 1 July 2001 but the user of the asset does not change or is an associate of the former user-for example, under a sale and leaseback arrangement-you must use the same method of working out the decline in value that the former holder used.
You must also use the effective life the former holder used where they used the diminishing value method or the effective life equal to the remaining period of the effective life used by them where they used the prime cost method.
If you cannot readily ascertain the method the former holder used or if they did not use a method, you must use the diminishing value method. An effective life determined by the Commissioner of Taxation must be used if you cannot find out the effective life the former holder used or if they did not use an effective life.
You must recalculate the effective life of the depreciating asset if the asset's cost increases by 10 per cent or more in any income year, including the one in which you start to hold it-see How to recalculate effective life for information about recalculating effective life.
Last modified: 01 Jun 2005QC 27399