Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES

PART 3-45 - RULES FOR PARTICULAR INDUSTRIES AND OCCUPATIONS

Division 328 - Small business entities

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Subdivision 328-D - Capital allowances for small business entities

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Special rules about roll-overs

SECTION 328-253 Deductions for cost addition amounts

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328-253(1)
This section applies in working out the amount that the transferor or transferee can deduct for the BAE year under subsection 328-180(2) or 328-190(3) for expenditure incurred by the transferor or transferee during the BAE year that is included in the second element of the *cost of a depreciating asset.

Expenditure incurred by transferor

328-253(2)
If the expenditure was incurred by the transferor, the amount that can be deducted under subsection 328-180(2) or 328-190(3) for the BAE year is split equally between:

(a) the transferor and the transferee; or

(b) if there are 2 or more occurrences of *balancing adjustment events for relevant entities for the BAE year and a roll-over is chosen for each occurrence - the entities concerned.

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Expenditure incurred by transferee

328-253(3)
If the expenditure was incurred by the transferee:

(a) the transferor cannot deduct anything for the expenditure for the BAE year; and

(b) the amount that can be deducted under subsection 328-180(2) or 328-190(3) for the expenditure for the BAE year is:

(i) deductible by the transferee; or

(ii) if there are 2 or more occurrences of ^* balancing adjustment events for relevant entities for the BAE year and a roll-over is chosen for each occurrence - split equally between the entities concerned.

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Special rule for expenditure on assets costing less than $1,000

328-253(4)
Subsection (5) applies if:

(a) the transferor incurred the expenditure in relation to an asset of a kind mentioned in paragraph 328-180(1)(b) ; and

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(b) a *balancing adjustment event occurs for that asset before the BAE day.

Note:

This threshold may be affected by section 328-180 (about temporary increased access to accelerated depreciation) or 328-181 (about temporary full expensing) of the Income Tax (Transitional Provisions) Act 1997 .

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History

S 328-253(4) amended by No 92 of 2020, s 3 and Sch 7 item 24, by substituting the note, effective 1 January 2021. The note formerly read:

Note:

Instead of $1,000, the threshold in subsection 328-180(1) may be $20,000, $25,000, $30,000 or $150,000 for assets first acquired between 12 May 2015 and 31 December 2020: see subsections 328-180(4) and (4A) of the Income Tax (Transitional Provisions) Act 1997 .

S 328-253(4) amended by No 61 of 2020, s 3 and Sch 4 item 17, by substituting " 31 December 2020: see subsections 328-180(4) and (4A) " for " 30 June 2020: see subsection 328-180(4) " in the note, effective 20 June 2020.

S 328-253(4) amended by No 22 of 2020, s 3 and Sch 1 item 14, by substituting " $25,000, $30,000 or $150,000 " for " $25,000 or $30,000 " in the note, effective 25 March 2020.

S 328-253(4) amended by No 51 of 2019, s 3 and Sch 1 item 7, by substituting the note, effective 1 July 2019. The note formerly read:

Note:

The threshold in subsection 328-180(1) is $20,000 (instead of $1,000) for assets first acquired between 12 May 2015 and 30 June 2019: see subsection 328-180(4) of the Income Tax (Transitional Provisions) Act 1997 .

S 328-253(4) amended by No 109 of 2018, s 3 and Sch 1 item 7, by substituting " 30 June 2019 " for " 30 June 2018 " in the note, effective 1 October 2018.

S 328-253(4) amended by No 56 of 2017, s 3 and Sch 1 item 7, by substituting " and 30 June 2018 " for " and 30 June 2017 " in the note, effective 1 July 2017.

S 328-253(4) amended by No 67 of 2015, s 3 and Sch 1 item 8, by inserting a note, effective 22 June 2015.

S 328-253(4) amended by No 23 of 2012, s 3 and Sch 2 item 60, by substituting " an asset of a kind mentioned in paragraph 328-180(1)(b) " for " a *low-cost asset " in para (a), applicable in relation to the 2012-13 income year and later income years.

328-253(5)
The transferee cannot deduct anything for the expenditure for the BAE year, and subsection 328-215(4) does not apply to the transferee in relation to the asset.

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