Coronavirus Economic Response Package Omnibus Act 2020 (22 of 2020)

Schedule 2   Backing business investment

Income Tax Assessment Act 1997

6   At the end of section 705-45 (after the notes)

Add:

(2) If:

(a) an asset of the joining entity is a *depreciating asset to which Division 40 applies; and

(b) either of the following has applied before the joining entity became a *subsidiary member for the purposes of working out the asset's decline in value under Division 40:

(i) section 40-82;

(ii) Subdivision 40-BA of the Income Tax (Transitional Provisions) Act 1997; and

(c) the asset's *tax cost setting amount would be greater than the joining entity's *terminating value for the asset;

the asset's tax cost setting amount is reduced so that it equals the terminating value.

Note 1: The provisions referred to in paragraph (b) provide for an accelerated decline in value of certain assets.

Note 2: Unlike the position with a reduction in tax cost setting amount under section 705-40, the amount of the reduction is not re-allocated among other assets.