Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-45 - RULES FOR PARTICULAR INDUSTRIES AND OCCUPATIONS  

Division 328 - Small business entities  

Subdivision 328-D - Capital allowances for small business entities  

Special rules about roll-overs

SECTION 328-253   Deductions for cost addition amounts  

328-253(1)    
This section applies in working out the amount that the transferor or transferee can deduct for the BAE year under subsection 328-180(2) or 328-190(3) for expenditure incurred by the transferor or transferee during the BAE year that is included in the second element of the *cost of a depreciating asset.

Expenditure incurred by transferor

328-253(2)    
If the expenditure was incurred by the transferor, the amount that can be deducted under subsection 328-180(2) or 328-190(3) for the BAE year is split equally between:

(a) the transferor and the transferee; or

(b) if there are 2 or more occurrences of *balancing adjustment events for relevant entities for the BAE year and a roll-over is chosen for each occurrence - the entities concerned.

Expenditure incurred by transferee

328-253(3)    
If the expenditure was incurred by the transferee:

(a) the transferor cannot deduct anything for the expenditure for the BAE year; and

(b) the amount that can be deducted under subsection 328-180(2) or 328-190(3) for the expenditure for the BAE year is:

(i) deductible by the transferee; or

(ii) if there are 2 or more occurrences of ^* balancing adjustment events for relevant entities for the BAE year and a roll-over is chosen for each occurrence - split equally between the entities concerned.

Special rule for expenditure on assets costing less than $1,000

328-253(4)    
Subsection (5) applies if:

(a) the transferor incurred the expenditure in relation to an asset of a kind mentioned in paragraph 328-180(1)(b) ; and

(b) a *balancing adjustment event occurs for that asset before the BAE day.

Note:

This threshold may be affected by section 328-180 (about temporary increased access to accelerated depreciation) or 328-181 (about temporary full expensing) of the Income Tax (Transitional Provisions) Act 1997 .

328-253(5)    
The transferee cannot deduct anything for the expenditure for the BAE year, and subsection 328-215(4) does not apply to the transferee in relation to the asset.