Income Tax Assessment Act 1997
Note: A Commissioner ' s Remedial Power (CRP 2017/2) is relevant to this part of the tax law. Taxation Administration (Remedial Power - Small Business Restructure Roll-over) Determination 2017 (F2017L01687) modifies the operation of s 40-340 of the Income Tax Assessment Act 1997 and any other provisions of a taxation law whose operation is affected by the modified operation of s 40-340 in relation to an asset transferred under a small business restructure roll-over (item 8 of the table in s 40-340(1) ).
The operation of the relevant provisions is modified as follows:
If s 40-340 of ITAA 1997 provides for rollover relief in relation to a disposal of a depreciating asset because the condition in item 8 of the table in s 40-340(1) of ITAA 1997 is satisfied in relation to the asset, that section has effect as if it also provided that the disposal of the asset has no direct consequences under the income tax law (other than Div 40 of ITAA 1997).
The modification applies in respect of transfers on or after 8 May 2018.
An entity must treat a modification as not applying to it or any other entity if the modification would produce a less favourable result for it. The Commissioner is empowered by s 370-5 of Sch 1 to the Taxation Administration Act 1953 to make modifications, by legislative instrument, to ensure the law is administered to achieve its intended purpose or object.
The decline in value of a *depreciating asset you *hold for the income year (the current year ) in which you start to use the asset, or have it *installed ready for use, for a *taxable purpose is the amount worked out under subsection (2) if:
(a) you are an entity covered by subsection (4) (about medium sized businesses) for the current year and for the income year in which you started to hold the asset; and
(b) you first acquired the asset in the period beginning at 7.30 pm, by legal time in the Australian Capital Territory, on 2 April 2019 and ending on 30 June 2020; and
(c) the current year ends:
(i) on or after 2 April 2019; and
(ii) on or before 30 June 2020; and
(d) the asset is a depreciating asset whose *cost as at the end of the current year is less than $30,000.
The amount is:
(a) unless paragraph (b) applies - the asset ' s *cost as at the end of the current year; or
(b) if the asset ' s *start time occurred in an earlier income year - the sum of the asset ' s *opening adjustable value for the current year and any amount included in the second element of its cost for the current year. Later year 40-82(3)
The decline in value of a *depreciating asset you *hold for an income year (the later year ) is the first amount included in the second element of the asset ' s *cost for the later year if:
(a) you are an entity covered by subsection (4) (about medium sized businesses) for the later year; and
(b) the amount so included is less than $30,000; and
(c) you worked out the decline in value of the asset for an earlier income year under subsection (1); and
(d) the later year ends:
(i) on or after 2 April 2019; and
(ii) on or before 30 June 2020.
An entity is covered by this subsection for an income year if:
(a) the entity is not a *small business entity for the income year; and
(b) the entity would be a small business entity for the income year if:
(i) each reference in Subdivision 328-C (about what is a small business entity) to $10 million were instead a reference to $50 million; and
Years ending after 30 June 2020 40-82(5)
(ii) the reference in paragraph 328-110(5)(b) to a small business entity were instead a reference to an entity covered by this subsection.
For an income year ending after 30 June 2020, the asset ' s decline in value is worked out under the other provisions of this Division.