INCOME TAX ASSESSMENT ACT 1997

CHAPTER 2 - LIABILITY RULES OF GENERAL APPLICATION  

PART 2-10 - CAPITAL ALLOWANCES: RULES ABOUT DEDUCTIBILITY OF CAPITAL EXPENDITURE  

Division 40 - Capital allowances  

Subdivision 40-B - Core provisions  

Operative provisions

SECTION 40-102   Capped life of certain depreciating assets  

40-102(1)  
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.


Table
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

40-102(4A)  


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.

40-102(5)  


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.


Table
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


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