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.
You can allocate * project amounts to a project pool. 40-830(2)
You can deduct amounts for * project amounts that are allocated to the project pool. 40-830(3)
You calculate your deduction for an income year for a project pool in this way:
DV project pool life
(a) the * project life of the project; or
(b) if its project life has been recalculated - its most recently recalculated project life.
(a) for the first income year that a * project amount is allocated to the pool - the sum of the project amounts allocated to the pool for that year; or
(b) for a later income year - the sum of the pool ' s * closing pool value for the previous income year and any project amounts allocated to the pool for the later year.
The calculation is made under subsection 40-832(3) for project amounts incurred on or after 10 May 2006 for projects that start to operate on or after that day.
If, in an income year, you abandon, sell or otherwise dispose of a project for which you have a project pool, you can deduct for that year the sum of the pool ' s * closing pool value for the previous income year and any * project amounts allocated to the pool for the income year. 40-830(5)
Your assessable income for that income year includes any amount you receive for the abandonment, sale or other disposal. 40-830(6)
Your assessable income for an income year includes other capital amounts that you *derive in that year in relation to a * project amount allocated to your project pool or in relation to something on which the project amount is expended. 40-830(7)
The closing pool value of a project pool for an income year is:
(a) for the first income year that a * project amount is allocated to the pool - the sum of the project amounts allocated to the pool for that year less the amount you could deduct for the pool for that year (apart from section 40-835 ); or
(b) for a later income year - the sum of the pool ' s * closing pool value for the previous income year and any project amounts allocated to the pool for the later year less the amount you could deduct for the pool for the later year (apart from section 40-835 ). 40-830(8)
Your deduction for an income year cannot be more than the amount of the component " pool value " in the formula in subsection (3) for that year.