CHAPTER 2
-
LIABILITY RULES OF GENERAL APPLICATION
PART 2-10
-
CAPITAL ALLOWANCES: RULES ABOUT DEDUCTIBILITY OF CAPITAL EXPENDITURE
Division 40
-
Capital allowances
History
Div 40 substituted for Divs 40, 41 and 42 by No 76 of 2001.
Subdivision 40-D
-
Balancing adjustments
History
Subdiv 40-D inserted by No 76 of 2001.
Operative provisions
SECTION 40-370
Balancing adjustments where there has been use of different car expense methods
40-370(1)
An amount is included in your assessable income or you can deduct an amount under this section instead of section
40-285
if:
(a)
a *balancing adjustment event occurs for a *car you *held; and
(b)
you have deducted or can deduct an amount for the decline in value of the car for an income year under this Division; and
(c)
you chose the
"
cents per kilometre
"
method in Subdivision
28-C
for deducting your car expenses for the car for one or more other income years.
Note 1:
This means if you have only used the
"
log book
"
method since you began using the car, you calculate the assessable amount or deductible amount under section
40-285
.
Note 2:
Also, if you have only used the
"
cents per kilometre
"
method since you began using the car, no amount is assessable or deductible under this section or section
40-285
.
History
S 40-370(1) amended by No 162 of 2015, s 3 and Sch 1 items 33
-
35, by substituting para (c), omitting
"
or the
"
one-third of actual expenses
"
method
"
after
"
the
"
log book
"
method
"
from note 1 and
"
or the
"
12% of original value
"
method
"
after
"
the
"
cents per kilometre
"
method
"
from note 2, effective 30 November 2015. No 162 of 2015, s 3 and Sch 1 item 45 contains the following application provision:
45 Application of amendments
45(1)
Subject to subitems (2) and (3), the amendments made by this Schedule apply in relation to the 2015-16 income year and later income years.
…
45(3)
Despite the amendments of section
40-370
of the
Income Tax Assessment Act 1997
made by this Schedule, that section continues to apply, in relation to a balancing adjustment event, as if those amendments had not been made if:
(a)
that balancing adjustment event occurs at or after the start of the 2015-16 income year for a car you held; and
(b)
you chose the
"
12% of original value
"
method in former Subdivision 28-D of that Act for deducting your car expenses for the car for one or more earlier income years.
Para (c) formerly read:
(c)
you chose:
(i)
the
"
cents per kilometre
"
method in Subdivision
28-C
; or
(ii)
the
"
12% of original value
"
method in Subdivision
28-D
;
for deducting your car expenses for the car for one or more other income years.
40-370(2)
Work out the amount you include in your assessable income or the amount you can deduct in this way:
Method statement
Step 1.
Subtract the *car
'
s *adjustable value just before the *balancing adjustment event occurred from the car
'
s *termination value.
Step 2.
Reduce the step 1 amount by the part of the *car
'
s decline in value that is attributable to your using the car, or having it *installed ready for use, for purposes other than *taxable purposes. You do this by applying the formula in subsection
40-290(2)
.
Step 3.
Multiply the step 2 amount by the total number of days for which you deducted the decline in value of the *car under this Division.
Step 4.
Divide the step 3 amount by the total number of days you *held the *car.
Step 5.
The step 4 amount is a deduction if it is negative or it is included in your assessable income if it is positive.
40-370(3)
In working out the *adjustable value for the income years for which you chose the
"
cents per kilometre method
"
, assume the decline in value was calculated under this Division on the same basis as those income years when that method did not apply.
History
S 40-370(3) substituted by No 162 of 2015, s 3 and Sch 1 item 36, applicable in relation to the 2015-16 income year and later income years. S 40-370(3) formerly read:
40-370(3)
In working out the *adjustable value for the income years for which you chose the
"
cents per kilometre method
"
or the
"
12% of original value
"
method, you are to assume the decline in value was calculated under this Division on the same basis as those income years when those methods did not apply.
40-370(4)
In working out the reduction in step 2 for the income years for which you chose the
"
cents per kilometre method
"
, assume that:
(a)
you had not chosen that method for the *car; and
(b)
Division
28
(about car expenses) had not applied to the car; and
(c)
20% was the extent of your use of the car for *taxable purposes.
History
S 40-370(4) substituted by No 162 of 2015, s 3 and Sch 1 item 36, applicable in relation to the 2015-16 income year and later income years. S 40-370(4) formerly read:
40-370(4)
In working out the reduction in step 2 for the income years for which you chose the
"
cents per kilometre method
"
or the
"
12% of original value
"
method, you must assume that:
(a)
you had not chosen either of those methods for the *car; and
(b)
Division
28
(car expenses) had not applied to the car; and
(c)
you used the car for *taxable purposes:
(i)
to the extent of 20% if you used the
"
cents per kilometre
"
method; or
(ii)
to the extent of one-third if you used the
"
12% of original value
"
method.
History
S 40-370 inserted by No 76 of 2001.