Income Tax (Transitional Provisions) Act 1997
For the purposes of Division 40 of the Income Tax Assessment Act 1997 , the decline in value of a depreciating asset you hold for an income year (the current year ) is the amount worked out under subsection (3) if: (a) you start to hold the asset at or after the 2020 budget time; and (b) you start to use the asset, or have it installed ready for use, for a taxable purpose in the current year; and (c) you are covered by section 40-150 for the asset; and (d)
(i) section 40-155 (about businesses with turnover under $5 billion);
(e) no balancing adjustment event happens to the asset in the current year; and (f) 40-190 in relation to the current year.
(ii) section 40-157 (about corporate tax entities with income under $5 billion); and
However, this section does not apply if: (a) where section 40-155 covers you for the current year (regardless whether section 40-157 also covers you for the current year) - an exclusion applies to you and the asset for the current year under section 40-165 (about exclusions for businesses with turnover of $50 million or more); or (b) where section 40-157 covers you for the current year (but section 40-155 does not):
(i) an exclusion applies to you and the asset for the current year under section 40-165 ; or
(ii) an exclusion applies to you and the asset for the current year under section 40-167 (about exclusions for corporate tax entities with income under $5 billion).
The decline in value for the current year is: (a) (b)
The asset ' s start time is when you first use it, or have it installed ready for use, for any purpose (including a non-taxable purpose): see subsection 40-60(2) of the Income Tax Assessment Act 1997 .
A case covered by paragraph (b) is where you start to hold the asset in the period 6 October 2020 to 30 June 2021 and use it for only non-taxable purposes in that period, then first use it for a taxable purpose in the period 1 July 2021 to 30 June 2022.
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