INCOME TAX (TRANSITIONAL PROVISIONS) ACT 1997 (ARCHIVE)

CHAPTER 2 - LIABILITY RULES OF GENERAL APPLICATION  

PART 2-10 - CAPITAL ALLOWANCES: RULES ABOUT DEDUCTIBILITY OF CAPITAL EXPENDITURE  

Division 42 - Depreciation  

SECTION 42-6 (ARCHIVE)   General transitional provision  

42-6(1)    
The following subsections have effect if you have deducted or can deduct an amount for depreciation of plant:

(a) under the old depreciation provisions; or

(b) using the ``log book'' method or the ``one-third of actual expenses'' method under section 82KUD or 82KW , or Schedule 2A , of the 1936 Act;

and you can deduct an amount for depreciation of it under the new depreciation provisions or Division 28 of the 1997 Act.

Method

42-6(2)    
You use the same method of calculation that you were using for the plant under the old depreciation provisions.

Cost

42-6(3)    
The cost of the plant is the cost you were using under the old depreciation provisions.

42-6(4)    
However, if you are using the diminishing value method for the plant and section 58 of the 1936 Act applied to its acquisition by you, the cost is:

(a) the cost used by the transferor; or

(b) if there were earlier successive transferors - the cost used by the earliest successive transferor.

Rate

42-6(5)    
Your rate is the annual depreciation percentage worked out under the old depreciation provisions.

42-6(6)    
However, if you are using the diminishing value method and you acquired or constructed the plant before 27 February 1992, you multiply that percentage by 1.5.

42-6(7)    
However, if you are using the prime cost method and you acquired or constructed the plant after 26 February 1992, you multiply that percentage by two thirds.

Note:

Section 42-400 of this Act is relevant in working out whether plant was acquired or constructed after 26 February 1992.