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-B - Core provisions  

SECTION 40-60   Pooling under Subdivision 42-L of the former Act  

40-60(1)    
Units of plant that you had allocated to a pool under Subdivision 42-L of the former Act and that were allocated to the pool by 30 June 2001 are treated as a single depreciating asset for the purposes of Division 40 of the new Act.

40-60(2)    
Division 40 of the new Act applies to the single depreciating asset on this basis:

(a) its cost and opening adjustable value at 1 July 2001 is the closing balance of the pool for your income year in which 30 June 2001 occurred; and

(b) you must use the diminishing value method; and

(c) in applying the formula in section 40-70 of the new Act for your income year in which 1 July 2001 occurs - it has a base value equal to that opening adjustable value; and

(d) you replace the component in the formula in subsection 40-70(1) of the new Act that includes an asset's effective life with the pool percentage you were using for the pool; and

(e) if an item of plant is removed from the pool because a balancing adjustment event occurs for the item or because of subsection (3) of this section, section 40-115 of the new Act applies so that you are treated as having split the single depreciating asset into the removed asset and the remaining assets in the pool; and

(f) if an amount is included in the second element of the cost of a depreciating asset in the pool, Division 40 of the new Act applies as if that amount had been included in the second element of the cost of the single asset.

Note:

There are special rules for entities that have substituted accounting periods: see section 40-65 .

40-60(3)    
An item of plant in the pool is automatically removed from the pool if you stop using it wholly for taxable purposes (except because a balancing adjustment event occurs for the item).

Note 1:

You work out the decline in value of an item removed under this subsection under Subdivision 40-B of the new Act, using the cost for it worked out under section 40-205 of the new Act.

Note 2:

There are special rules for entities that have substituted accounting periods: see section 40-65 .