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 42-7 (ARCHIVE)   Special rules for plant used but not depreciated before the 1997-98 income year  

42-7(1)    
This section applies to you if:

(a) you can first deduct an amount for depreciation of plant for the 1997-98 income year or a later income year; and

(b) you owned and used it before that income year but:

(i) you did not use it for the purpose of producing assessable income; or

(ii) a provision of the 1936 Act denied a depreciation deduction for it.

Method

42-7(2)    
If section 58 of the 1936 Act applied to your acquisition of the plant, you use the method of calculation that the transferor was using or would have been required to use.

Note:

However, for other plant to which this section applies, you choose your method under the 1997 Act.

Cost

42-7(3)    
The cost of the plant is the cost you would have been required to use if you had been deducting amounts for depreciation of it under the 1936 Act.

42-7(4)    
However, if you are using the diminishing value method for the plant and section 58 of the 1936 Act applied to your acquisition of the plant, 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

42-7(5)    
You use the rate worked out under subsections 42-6(5) , (6) and (7) .