Income Tax (Transitional Provisions) 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-D - Balancing adjustments  

SECTION 40-345   Balancing adjustments for depreciating assets that retain CGT indexation  

40-345(1)  
The amount included in your assessable income under subsection 40-285(1) or 104-240(1) of the new Act as a result of a balancing adjustment event occurring for:


(a) plant that you acquired at or before 11.45 am, by legal time in the Australian Capital Territory, on 21 September 1999; or


(b) a depreciating asset that is not plant and that you acquired before 1 July 2001;

is reduced (but not below nil) if:


(c) for a paragraph (a) case - there would have been a reduction under subsection 42-192(2) of the former Act as a result of that event; or


(d) for a paragraph (b) case - there would have been a reduction under subsection 42-192(2) of the former Act as a result of that event if the asset were plant.

40-345(2)  
The amount of the reduction is the amount worked out under subsection 42-192(2) of the former Act.

40-345(3)  
There is no reduction under subsection (1) to an amount included in your assessable income under subsection 104-240(1) if the balancing adjustment event results in a discount capital gain under Division 115 .

40-345(4)  
However, you can choose not to make a reduction under subsection (1) and instead take advantage of the discount capital gain.

40-345(5)  
Subsection (6) applies to an entity (the transferee ) if there is roll-over relief under section 40-340 of the new Act as a result of a balancing adjustment event happening to a depreciating asset held by the transferee.

40-345(6)  
Subsections (1), (2), (3) and (4) apply also to the transferee if:


(a) for a depreciating asset that is plant:


(i) the transferor referred to in section 40-340 of the new Act started to hold the plant under a contract entered into at or before 11.45 am, by legal time in the Australian Capital Territory, on 21 September 1999; or

(ii) the transferor constructed it and the construction started at or before that time; or

(iii) the transferor acquired it in some other way at or before that time; or

(iv) the transferor acquired it from an entity that was working out the decline in value of the plant under subsection 40-10(3) or 40-12(3) of this Act and subparagraph (i), (ii) or (iii) of this paragraph applied to that entity or to the earliest successive transferor; or


(b) for a depreciating asset that is not plant:


(i) the transferor started to hold the asset under a contract entered into before 1 July 2001; or

(ii) the transferor constructed it and the construction started at or before that day; or

(iii) the transferor acquired it in some other way before that day.

 

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