Income Tax Assessment Act 1997
View history note
Hide history noteNote: A Commissioner ' s Remedial Power (CRP 2017/2) is relevant to this part of the tax law. Taxation Administration (Remedial Power - Small Business Restructure Roll-over) Determination 2017 (F2017L01687) modifies the operation of s 40-340 of the Income Tax Assessment Act 1997 and any other provisions of a taxation law whose operation is affected by the modified operation of s 40-340 in relation to an asset transferred under a small business restructure roll-over (item 8 of the table in s 40-340(1) ).
The operation of the relevant provisions is modified as follows:
If s 40-340 of ITAA 1997 provides for rollover relief in relation to a disposal of a depreciating asset because the condition in item 8 of the table in s 40-340(1) of ITAA 1997 is satisfied in relation to the asset, that section has effect as if it also provided that the disposal of the asset has no direct consequences under the income tax law (other than Div 40 of ITAA 1997).
The modification applies in respect of transfers on or after 8 May 2018.
An entity must treat a modification as not applying to it or any other entity if the modification would produce a less favourable result for it. The Commissioner is empowered by s 370-5 of Sch 1 to the Taxation Administration Act 1953 to make modifications, by legislative instrument, to ensure the law is administered to achieve its intended purpose or object.
SECTION 40-80 When you can deduct the asset ' s cost
Exploration or prospecting
40-80(1)
The decline in value of a * depreciating asset you * hold is the asset ' s * cost if:
(a) you first use the asset for * exploration or prospecting for * minerals, or quarry materials, obtainable by * mining and quarrying operations; and
(b) when you first use the asset, you do not use it for:
(i) development drilling for * petroleum; or
(ii) operations in the course of working a mining property, quarrying property or petroleum field; and
(c) you satisfy one or more of these subparagraphs at the asset ' s * start time:
(i) you carry on mining and quarrying operations;
(ii) it would be reasonable to conclude you proposed to carry on such operations;
(iii) you carry on a * business of, or a business that included, exploration or prospecting for minerals or quarry materials obtainable by such operations, and expenditure on the asset was necessarily incurred in carrying on that business; and
(d) in a case where the asset is a *mining, quarrying or prospecting right - you acquired the asset from an *Australian government agency or a *government entity; and
(e) in a case where the asset is *mining, quarrying or prospecting information:
(i) you acquired the asset from an Australian government agency or a government entity; or
(ii) the asset is a geophysical or geological data package you acquired from an entity to which subsection (1AA) applies; or
(iii) you created the asset, or contributed to the cost of its creation; or
(iv) you caused the asset to be created, or contributed to the cost of it being created, by an entity to which subsection (1AA) applies.
40-80(1A)
(Repealed by No 96 of 2014)
40-80(1AA)
This subsection applies to an entity if, at the time of the acquisition referred to in subparagraph (1)(e)(ii) or the creation referred to in subparagraph (1)(e)(iv), the entity predominantly carries on a *business of providing *mining, quarrying or prospecting information to other entities that:
(a) carry on *mining and quarrying operations; or
(b) it would be reasonable to conclude propose to carry on such operations; or
(c) carry on a business of, or a business that included, *exploration or prospecting for *minerals or quarry materials obtainable by such operations.
40-80(1AB)
If an amount is included in the second element of the *cost of a *depreciating asset, subsection (1) applies in relation to that amount only if:
(a) your first use of the asset, after the inclusion of the amount in the second element, is for *exploration or prospecting for *minerals, or quarry materials, obtainable by *mining and quarrying operations; and
(b) at the time of that first use:
(i) you satisfy paragraph (1)(b) as if that first use was your first use of the asset; and
(ii) you satisfy paragraph (1)(c) as if the time of that first use was the asset ' s *start time; and
(c) if the amount relates to a *mining, quarrying or prospecting right - after the inclusion of the amount in the second element, you satisfy paragraph (1)(d) in relation to the right; and
(d) if the amount relates to *mining, quarrying or prospecting information - after the inclusion of the amount in the second element:
(i) you satisfy paragraph (1)(e) in relation to the information; or
(ii) you would satisfy that paragraph, in relation to the economic benefit that resulted in the inclusion of the amount in the second element, if that economic benefit were the asset referred to in that paragraph.
40-80(1AC)
If subsection (1) does not apply to a *depreciating asset:
(a) the fact that subsection (1) does not apply to the asset does not prevent the application of subsection (1AB) to an amount included in the second element of the *cost of the asset; but
(b) subsection (1) only affects the asset ' s decline in value to the extent that the asset ' s cost consists of that amount.
Depreciating assets used for certain purposes
40-80(2)
The decline in value of a * depreciating asset you start to * hold in an income year is the asset ' s * cost if:
(a) that cost does not exceed $300; and
(b) you use the asset predominantly for the * purpose of producing assessable income that is not income from carrying on a * business; and
(c) the asset is not one that is part of a set of assets that you started to hold in that income year where the total cost of the set of assets exceeds $300; and
(d) the total cost of the asset and any other identical, or substantially identical, asset that you start to hold in that income year does not exceed $300.
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