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  

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History

Div 40 substituted for Divs 40, 41 and 42 by No 76 of 2001.

Subdivision 40-B - Core provisions  

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Subdiv 40-B substituted by No 76 of 2001.

Operative provisions

SECTION 40-72   Diminishing value method for post-9 May 2006 assets  

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40-72(1)    

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You work out the decline in value of a *depreciating asset for an income year using the diminishing value method in this way if you started to *hold the asset on or after 10 May 2006:

	*Base value	×	Days held	×	200%
			365		Asset ' s *effective life

where:

days held
has the same meaning as in subsection 40-70(1) .

Note:

If you recalculate the effective life of a depreciating asset, you use that recalculated life in working out your deduction.

You can choose to recalculate effective life because of changed circumstances: see section 40-110 . That section also requires you to recalculate effective life in some cases.

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S 40-72(1) amended by No 14 of 2012, s 3 and Sch 3 items 12 and 13, by substituting the formula and omitting " base value has the same meaning as in subsection 40-70(1). " after " where: " , effective 1 July 2012. For application and transitional provisions see note under s 15-85 . The formula formerly read:

" Base value

×

Days         held                 365

×

200%                   Asset ' s *effective life "

Exception: intangibles

40-72(2)    
You cannot use the *diminishing value method to work out the decline in value of:

(a)    *in-house software; or

(b)    an item of *intellectual property (except copyright in a *film); or

(c)    a *spectrum licence; or

(d) (Repealed by No 151 of 2020)

(e)    a *telecommunications site access right.

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S 40-72(2) amended by No 151 of 2020, s 3 and Sch 9 item 103, by repealing para (d), applicable in relation to a datacasting transmitter licence that was in existence before 17 June 2021, as if those amendments had not been made. Para (d) formerly read:

(d) a *datacasting transmitter licence; or

Limit on decline

40-72(3)    

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The decline in value of a *depreciating asset under this section for an income year cannot be more than the amount that is the asset ' s *base value for that income year.

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History

S 40-72(3) amended by No 14 of 2012, s 3 and Sch 3 item 14, by substituting " *base value " for " base value in the formula in subsection (1) " , effective 1 July 2012. For application and transitional provisions see note under s 15-85 .

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S 40-72 inserted by No 55 of 2006 , s 3 and Sch 5 item 1, effective 19 June 2006.

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