House of Representatives
New Business Tax System (Capital Allowances) Bill 1999
Supplementary Explanatory Memorandum and correction
(Circulated by authority of the Treasurer, the Hon Peter Costello, MP)General outline and financial impact
Full balancing adjustments on disposal of plant
These amendments:
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- include in assessable income the excess of disposal proceeds over the cost base of plant, indexed to 30 September 1999, where no depreciation deductions have been allowed on that plant; and
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- allow a deduction for such plant for the difference between those proceeds and the reduced cost base where those proceeds are less than the reduced cost base.
Financial and compliance cost impact: remain unchanged from costs provided in the Explanatory Memorandum to the New Business Tax System (Capital Allowances) Bill 1999.
Submarine cables and indefeasible rights to use them
These amendments:
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- alter the date of effect in order to allow depreciation deductions to be claimed by taxpayers who incur expenditure on IRUs over new cables after 11.45 am AEST on 21 September 1999. Formerly, taxpayers had to acquire the IRUs under contracts entered into after that time;
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- ensure that disposals and part disposals of IRUs are dealt with as balancing adjustments under the depreciation provisions, rather than as capital gains tax events; and
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- ensure that the disposal and partial disposal rules operate before the IRU has begun to be depreciated.
Financial and compliance cost impact: remain unchanged from costs provided in the Explanatory Memorandum to the New Business Tax System (Capital Allowances) Bill 1999.