New Business Tax System (Capital Allowances - Transitional and Consequential) Act 2001 (77 of 2001)

Schedule 2   General consequential amendments

Income Tax Assessment Act 1936

39   Subsection 73E(6)

Repeal the subsection, substitute:

Modification of capital allowance provisions applicable to transferee

(6) If a deduction is or becomes allowable to the transferee for the decline in value of the unit, the provisions of Division 40 (Capital allowances) of the Income Tax Assessment Act 1997 apply as if:

(a) the transferee had acquired the unit for a cost equal to the modified written-down value of the unit; and

(b) subsections 73B(21) and (22) had effect as if a reference in those subsections to the written-down value of the unit were a reference to the modified written-down value of the unit; and

(c) in relation to the year of income of the transferee in which the disposal took place, the component "days held" in the formula in section 40-70 or 40-75 of the Income Tax Assessment Act 1997 included the number of days in that year when the transferor both:

(i) held the unit within the meaning of Division 40 of the Income Tax Assessment Act 1997; and

(ii) used it for a taxable purpose within the meaning of that Division or had it installed ready for use for that purpose.