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.
If this section applies to a * depreciating asset, the effective life of the asset is the period (the capped life ) that applies to the asset under subsection (4) or (5) at the relevant time (which is worked out using subsection (3)). Working out if this section applies 40-102(2)
This section applies to a * depreciating asset if:
(a) you choose, under paragraph 40-95(1)(a) , to use an * effective life determined by the Commissioner for the asset under section 40-100 ; and
(b) your choice is limited to a determination in force at the time mentioned in paragraph 40-95(2)(a) or (c); and
(c) a * capped life applies to the asset under subsection (4) or (5) at the relevant time (which is worked out using subsection (3)); and
(d) the capped life is shorter than the effective life mentioned in paragraph (a). 40-102(3)
For the purposes of this section, the relevant time is:
(a) the * start time of the * depreciating asset if:
(i) paragraph 40-95(2)(c) applies to you; or
(ii) paragraph 40-95(2)(a) applies to you and a * capped life does not apply to the asset under subsection (4) or (5) at the time mentioned in that paragraph; or
(iii) paragraph 40-95(2)(a) applies to you and the capped life that applies to the asset under subsection (4) or (5) at the time mentioned in that paragraph is longer than the capped life that applies to the asset at its start time; or
(b) if paragraph (a) does not apply - the time mentioned in paragraph 40-95(2)(a) . Capped life 40-102(4)
If the * depreciating asset corresponds exactly to the description in column 2 of the table, the capped life of the asset is the period specified in column 3 of the table.
|Capped life of certain depreciating assets|
|Item||Kind of depreciating asset||Period|
|1||Aeroplane used predominantly for agricultural spraying or agricultural dusting||8 years|
|2||Aeroplane to which item 1 does not apply||10 years|
|3||Helicopter used predominantly for mustering, agricultural spraying or agricultural dusting||8 years|
|4||Helicopter to which item 3 does not apply||10 years|
|5||Bus with a *gross vehicle mass of more than 3.5 tonnes||7.5 years|
|6||Light commercial vehicle with a *gross vehicle mass of 3.5 tonnes or less and designed to carry a load of 1 tonne or more||7.5 years|
|7||Minibus with a *gross vehicle mass of 3.5 tonnes or less and designed to carry 9 or more passengers||7.5 years|
|8||Trailer with a *gross vehicle mass of more than 4.5 tonnes||10 years|
|9||Truck with a *gross vehicle mass of more than 3.5 tonnes (other than a truck that is used in *mining and quarrying operations and that is not of a kind that can be registered to be driven on a public road in the place in which the truck is operated)||7.5 years|
|10||Vessel for which you have a certificate under Part 2 of the Shipping Reform (Tax Incentives) Act 2012||10 years|
Item 10 of the table in subsection 40-102(4) does not apply to a vessel if:
(a) *ordinary income that you *derive, or your *statutory income, in relation to the vessel; or
(b) ordinary income that your *associate derives, or your associate ' s statutory income, in relation to the vessel;
is exempt from income tax under section 51-100 for the income year for which you are working out the vessel ' s decline in value.
If the * depreciating asset is of a kind described in column 2 of the table and is used in the industry specified in column 3 of the table for the asset, the capped life of the asset is the period specified in column 4 of the table.
|Capped life of certain depreciating assets used in specified industries|
|Item||Kind of depreciating asset||Industry in which the asset is used||Period|
|1||Gas transmission asset||Gas supply||20 years|
|2||Gas distribution asset||Gas supply||20 years|
|3||Oil production asset (other than an electricity generation asset or an offshore platform)||Oil and gas extraction||15 years|
|4||Gas production asset (other than an electricity generation asset or an offshore platform)||Oil and gas extraction||15 years|
|5||Offshore platform||Oil and gas extraction||20 years|
|6||Asset (other than an electricity generation asset) used to manufacture condensate, crude oil, domestic gas, liquid natural gas or liquid petroleum gas but not if the manufacture occurs in an oil refinery||Petroleum refining||15 years|
|7||Harvester||Primary production sector||6 2/3 years|
|8||Tractor||Primary production sector||6 2/3 years|