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This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law.

You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4.

Edited version of your private ruling

Authorisation Number: 1012600502758

Ruling

Subject: Income tax: capital allowances - project pools

The ruling concerned the following:

    1. Are the costs incurred by the company in respect of the upgrade regarded as project amounts as defined in subsection 40-840(2) of the Income Tax Assessment Act 1997 (ITAA 1997)?

    2. For the purposes of the 'entry history rule' in section 701-5 of the ITAA 1997, will the head company be taken to have incurred the costs in relation to the upgrade project amounts following the formation of the consolidated group?

    3. When the company becomes a transition taxpayer, will the tax consolidated group be entitled to deductions under Subdivision 40-I of the ITAA 1997 as modified by Subdivision 57-J of Schedule 2D of the Income Tax Assessment Act 1936 (ITAA 1936) for the upgrade project amounts that are directly connected with the project pool?

The Commissioner ruled that:

    1. Yes. The costs incurred by the company in respect of the upgrade are regarded as project amounts as defined in subsection 40-840(2) of the ITAA 1997.

    2. Yes. For the purposes of the 'entry history rule' in section 701-5 of the ITAA 1997, the head company will be taken to have incurred the costs in relation to the upgrade project amounts following the formation of the consolidated group.

    3. Yes. When the company becomes a transition taxpayer, the tax consolidated group will be entitled to deductions under Subdivision 40-I of the ITAA 1997 as modified by Subdivision 57-J of Schedule 2D of the ITAA 1936 for the upgrade project amounts that are directly connected with the project pool.


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