Taxation Laws Amendment (Research and Development) Act 2001 (170 of 2001)

Schedule 2   Plant etc.

Part 3   Effective life basis for deduction

Division 1   Amendments commencing at 12 pm on 29 January 2001

Income Tax Assessment Act 1936

19   After section 73E

Insert:

73EB Section 73BM roll-over relief on disposal of plant to another member of wholly-owned group

Roll-over relief where CGT roll-over relief allowed

(1) This section applies to the disposal of a unit of section 73BH plant by an eligible company (the transferor ) to another eligible company (the transferee ) if:

(a) the disposal involves a CGT event for which there is a roll-over under Subdivision 126-B of the Income Tax Assessment Act 1997 (or would be, disregarding the exemption in section 118-5 of that Act, so far as it relates to a car, motor cycle or similar vehicle, or to an interest in one); and

(b) Subdivision 170-D of the Income Tax Assessment Act 1997 does not apply to the disposal; and

(c) subject to subsection (5), a deduction or deductions have been allowed or are allowable to the transferor in respect of the unit of plant under section 73BH; and

(d) no deduction has been allowed or is allowable to the transferor in respect of the unit of plant under Division 42 (Depreciation) of the Income Tax Assessment Act 1997.

No balancing charges for transferor

(2) Section 73BM does not apply in respect of the disposal of the unit by the transferor.

Effect on transferee

(3) The transferee is entitled to a deduction under section 73BH worked out using the same effective life and method for working out deductions as the transferor was using in respect of the plant under that section.

Additional consequences

(4) For the purposes of Division 45 of the Income Tax Assessment Act 1997:

(a) if the transferor, or a partnership of which the transferor was a member, leased the unit of plant to another entity for most of the time when the transferor or partnership held the unit - the transferee is taken also to have done so; and

(b) if the transferor, or a partnership of which the transferor was a member, leased the unit to another entity - the transferee is taken also to have done so; and

(c) if the main business of the transferor, or a partnership of which the transferor was a member, was to lease units of plant of that kind - the main business of the transferee is taken also to have been to lease units of plant of that kind.

Subsequent applications of roll-over relief - relief available even if no deduction for subsequent transferor

(5) If, apart from this subsection, this section has applied to the disposal of the unit of section 73BH plant to the transferee, then, in working out whether it applies to a subsequent disposal of the unit of plant by:

(a) the transferee; or

(b) one or more subsequent successive transferees;

this section has effect as if paragraph (1)(c) (which deals with deductions) were ignored.

Notice to allow transferee to work out how this section applies

(6) The transferor must give the transferee a notice containing enough information about the transferor's holding of the unit of plant for the transferee to work out how this section applies to the transferee's holding of it.

(7) The transferor must give the notice within 6 months after the end of the transferee's year of income in which the disposal mentioned in subsection (1) occurred, or within a longer period allowed by the Commissioner.

(8) The transferee must keep the notice until the end of 5 years after the earlier of these events:

(a) the transferee disposes of the unit;

(b) the unit is lost or destroyed.

Penalty: 30 penalty units.

(9) The Criminal Code applies to the offence in subsection (8).