Income Tax Assessment Act 1997
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Hide history noteSECTION 328-175 Calculations for depreciating assets 328-175(1)
You can choose to calculate your deductions and some amounts of assessable income under this Subdivision instead of under Division 40 for an income year for all the *depreciating assets that you *hold if:
(a) you are a *small business entity for the income year; and
(b) you started to use the assets or have them *installed ready for use, for a *taxable purpose during or before that income year.
This subsection has effect subject to subsections (2) to (10).
Note:
If you choose to use this Subdivision for an income year, you continue to use this Subdivision for your general small business pool for a later income year even if you are not a small business entity, or do not choose to use this Subdivision, for the later year: see section 328-220 .
Exception: assets to which Division 40 does not apply
328-175(2)
This Subdivision does not apply to a * depreciating asset to which Division 40 does not apply because of section 40-45 .
Exception: primary production
328-175(3)
If you are a *small business entity for the income year, for each * depreciating asset you use to carry on a * primary production business and for which you could deduct amounts under Subdivision 40-F (about primary production depreciating assets) or Subdivision 40-G (about capital expenditure of primary producers and other landholders) apart from subsection (1), you can choose:
(a) to deduct amounts for it under Subdivision 40-F or 40-G ; or
(b) to calculate your deductions for it under this Subdivision.
Note:
A choice made by a transferor under this subsection for an asset applies also to the transferee if roll-over relief under subsection 40-340(1) or (3) is chosen: see section 328-245 .
328-175(4)
You must make the choice under subsection (3) for each *depreciating asset of the kind referred to in that subsection for the later of:
(a) the first income year for which you are, or last were, a *small business entity; or
(b) the income year in which you started to use the asset, or have it * installed ready for use, for a * taxable purpose.
Once you have made the choice for an asset, you cannot change it.
Exception: horticultural plants
328-175(5)
You cannot deduct amounts for * horticultural plants (including grapevines) under this Subdivision.
Exception: asset let on depreciating asset lease
328-175(6)
You cannot deduct amounts for a * depreciating asset under this Subdivision if the asset is being or might reasonably be expected to be let predominantly on a * depreciating asset lease.
Exception: assets in a low-value or software development pool
328-175(7)
You cannot deduct amounts for a * depreciating asset under this Subdivision if:
(a) the asset was allocated to your low-value pool under Subdivision 40-E , or to your pool under the former Subdivision 42-L, during an income year for which you were not a *small business entity or had not chosen to use this Subdivision; or
(b) the asset is * in-house software and expenditure on the asset is allocated to a software development pool under that Subdivision.
Note:
You will have to continue deducting amounts for these assets under Division 40 .
328-175(8)
A * depreciating asset referred to in subsection (7) is not allocated to your *general small business pool under this Subdivision and does not qualify for a deduction under section 328-180 .
Exception: assets for which previously entitled to a tax offset under the R & D provisions
328-175(9)
You cannot deduct amounts for a *depreciating asset for any period under this Subdivision if you are entitled under section 355-100 to a *tax offset for a deduction under section 355-305 for the asset for the same or an earlier period.
Exception: second-hand assets used in residential property
328-175(9A)
You cannot deduct amounts for a *depreciating asset under this Subdivision to the extent that section 40-27 prevents you from deducting amounts under subsection 40-25(1) for the asset.
Exception: restriction on choosing to use this Subdivision
328-175(10)
If:
(a) you choose to use this Subdivision to deduct amounts for your *depreciating assets for an income year; and
(b) you do not choose to use this Subdivision for a later income year for which you satisfy the conditions to make this choice (see subsection (1));
you cannot choose to use this Subdivision until at least 5 years after the first later income year for which you satisfied the conditions to make this choice but did not do so.
Note 1:
Your ability to choose to use this Subdivision may also be restricted by section 328-440 of the Income Tax (Transitional Provisions) Act 1997 .
Note 2:
If you choose to use this Subdivision for an income year, you continue to use it for assets that have been allocated to your general small business pool for a later income year even if you are not a small business entity, or do not choose to use this Subdivision, for the later year: see section 328-220.
Note 3:
Subsections 328-180(2) and (3) of the Income Tax (Transitional Provisions) Act 1997 affect the operation of this subsection in relation to income years ending on or after 12 May 2015.
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