Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-45 - RULES FOR PARTICULAR INDUSTRIES AND OCCUPATIONS  

Division 328 - Small business entities  

Subdivision 328-D - Capital allowances for small business entities  

Special rules about roll-overs

SECTION 328-250   Deductions for assets first used in BAE year  

328-250(1)  


This section applies in working out the amount that the transferor or transferee can deduct for the BAE year under subsection 328-180(1) (assets costing less than $1,000) or subsection 328-190(2) (assets that will be pooled) for a *depreciating asset that the transferor or transferee started to use, or have *installed ready for use, for a *taxable purpose during the BAE year.
Note:

Instead of $1,000, the threshold in subsection 328-180(1) may be $20,000, $25,000 or $30,000 for assets first acquired between 12 May 2015 and 30 June 2020: see subsection 328-180(4) of the Income Tax (Transitional Provisions) Act 1997 .

Asset first used by transferor

328-250(2)  


If the asset was first used or *installed ready for use by the transferor, the amount that can be deducted under subsection 328-180(1) or 328-190(2) for the asset for the BAE year is split equally between:


(a) the transferor and the transferee; or


(b) if there are 2 or more occurrences of *balancing adjustment events for relevant entities for the BAE year and a roll-over is chosen for each occurrence - the entities concerned.

Asset first used by transferee

328-250(3)  


If the asset was first used or *installed ready for use by the transferee:


(a) the transferor cannot deduct anything for the asset for the BAE year; and


(b) the amount that can be deducted under subsection 328-180(1) or 328-190(2) for the asset for the BAE year is:


(i) deductible by the transferee; or

(ii) if there are 2 or more occurrences of *balancing adjustment events for relevant entities for the BAE year and a roll-over is chosen for each occurrence - split equally between the entities concerned (except ones that did not use the asset or have it installed ready for use).
Example:

To continue the example from section 328-247 , the transferee buys an asset on the 150th day of the BAE year for $800.

On the 250th day of the year, Evan joins the transferee partnership. The new transferee partnership is a small business entity for the BAE year, and chooses to use this Subdivision for that year, and a further roll-over is chosen.

The original transferor cannot deduct anything for the asset. The original transferee (now a transferor) and the new transferee can deduct $400 each.

Special rule for assets costing less than $1,000

328-250(4)  
Subsection (5) applies if:


(a) the transferor started to use, or have *installed ready for use, an asset of a kind mentioned in paragraph 328-180(1)(b) during the BAE year; and


(b) a *balancing adjustment event occurs for that asset before the BAE day.

Note:

Instead of $1,000, the threshold in subsection 328-180(1) may be $20,000, $25,000 or $30,000 for assets first acquired between 12 May 2015 and 30 June 2020: see subsection 328-180(4) of the Income Tax (Transitional Provisions) Act 1997 .

328-250(5)  
The transferee cannot deduct anything for the asset for the BAE year, and subsection 328-215(4) does not apply to the transferee in relation to the asset.


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