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-E - Low-value and software development pools  

Operative provisions

SECTION 40-435   Private or exempt use of assets  

40-435(1)  
When you allocate a *depreciating asset to a low-value pool, you must make a reasonable estimate of the percentage (the taxable use percentage ) of your use of the asset (including any past use) that will be for a *taxable purpose over:


(a) for a *low-cost asset - its *effective life; or


(b) for a *low-value asset - any period of its effective life that is yet to elapse at the start of the income year for which you allocate it to the pool.

40-435(2)  


For the purposes of subsection (1), disregard a *taxable purpose that is the *purpose of producing assessable income:


(a) from the use of *residential premises to provide residential accommodation; but


(b) not in the course of carrying on a *business;

if, apart from subsections 40-25(5) and 40-27(6) , section 40-27 would reduce your deductions under subsection 40-25(1) for the asset.


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