Income Tax Assessment Act 1997

CHAPTER 2 - LIABILITY RULES OF GENERAL APPLICATION  

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

Division 40 - Capital allowances  

Subdivision 40-B - Core provisions  

Operative provisions

SECTION 40-82   Assets costing less than $150,000 - medium sized businesses - assets first acquired between 2 April 2019 and 31 December 2020  

Year in which asset first used, or installed ready for use, for a taxable purpose

40-82(1)    
The decline in value of a *depreciating asset you *hold for the income year (the current year ) in which you start to use the asset, or have it *installed ready for use, for a *taxable purpose is the amount worked out under subsection (2) if:

(a) you are an entity covered by subsection (4) (about medium sized businesses) for:

(i) the current year; and

(ii) the income year in which you started to hold the asset; and

(b) you first acquired the asset:

(i) at or after 7.30 pm, by legal time in the Australian Capital Territory, on 2 April 2019; and

(ii) before 12 March 2020; and

(c) the current year ends on or after 2 April 2019; and

(d) you start to use the asset, or have it installed ready for use, for a taxable purpose before 12 March 2020; and

(e) the asset is a depreciating asset whose *cost as at the end of the current year is less than $30,000.

Note:

The amount you can deduct may be reduced by other provisions, such as subsection 40-25(2) (about taxable purpose) and section 40-215 (about double deductions).

40-82(2)    
The amount is:

(a) unless paragraph (b) applies - the asset ' s *cost as at the end of the current year; or

(b) if the asset ' s *start time occurred in an earlier income year - the sum of the asset ' s *opening adjustable value for the current year and any amount included in the second element of its cost for the current year.

40-82(2A)    
The decline in value of a *depreciating asset you *hold for the income year (the current year ) in which you start to use the asset, or have it *installed ready for use, for a *taxable purpose is the amount worked out under subsection (2B) if:

(a) you are an entity covered by subsection (4) (about medium sized businesses), or by subsection (4A) (about medium sized businesses and certain assets) in relation to the asset, for:

(i) the current year; and

(ii) the income year in which you started to hold the asset; and

(b) you first acquired the asset:

(i) at or after 7.30 pm, by legal time in the Australian Capital Territory, on 2 April 2019; and

(ii) on or before 31 December 2020; and

(c) the current year ends on or after 12 March 2020; and

(d) you start to use the asset, or have it installed ready for use, for a taxable purpose:

(i) on or after 12 March 2020; and

(ii) on or before 30 June 2021; and

(e) the asset is a depreciating asset whose *cost as at the end of the earlier of:

(i) the end of the current year; and

(ii) 31 December 2020;

is less than $150,000.

Note 1:

The amount you can deduct may be reduced by other provisions, such as subsection 40-25(2) (about taxable purpose) and section 40-215 (about double deductions).

Note 2:

This subsection does not apply if Subdivision 40-BB of the Income Tax (Transitional Provisions) Act 1997 applies: see section 40-145 of that Act.

40-82(2B)    
The amount is:

(a) unless paragraph (b) applies - the asset ' s *cost as at the earlier of:

(i) the end of the current year; and

(ii) 31 December 2020; or

(b) if the asset ' s *start time occurred in an earlier income year - the sum of:

(i) the asset ' s *opening adjustable value for the current year; and

(ii) any amount included in the second element of the asset ' s cost for the current year, other than an amount included after 31 December 2020.

Later year

40-82(3)    
The decline in value of a *depreciating asset you *hold for an income year (the later year ) is the first amount included in the second element of the asset ' s *cost for the later year if:

(a) you are an entity covered by subsection (4) (about medium sized businesses) for the later year; and

(aa) the amount is included before 12 March 2020; and

(b) the amount included is less than $30,000; and

(c) you worked out the decline in value of the asset for an earlier income year under subsection (1); and

(d) the later year ends on or after 2 April 2019.

Note:

The amount you can deduct may be reduced by other provisions, such as subsection 40-25(2) (about taxable purpose) and section 40-215 (about double deductions).

40-82(3A)    
The decline in value of a *depreciating asset you *hold for an income year (the later year ) is the first amount included in the second element of the asset ' s *cost for the later year if:

(a) you are an entity covered by subsection (4) (about medium sized businesses), or by subsection (4B) (about medium sized businesses and certain amounts) in relation to the amount, for the later year; and

(b) the amount is included:

(i) on or after 12 March 2020; and

(ii) on or before 31 December 2020; and

(c) the amount included is less than $150,000; and

(d) you worked out the decline in value of the asset for an earlier income year under subsection (1) or (2A); and

(e) the later year ends on or after 12 March 2020.

Note 1:

The amount you can deduct may be reduced by other provisions, such as subsection 40-25(2) (about taxable purpose) and section 40-215 (about double deductions).

Note 2:

This subsection does not apply if Subdivision 40-BB of the Income Tax (Transitional Provisions) Act 1997 applies: see section 40-145 of that Act.

Medium sized business

40-82(4)    
An entity is covered by this subsection for an income year if:

(a) the entity is not a *small business entity for the income year; and

(b) the entity would be a small business entity for the income year if:

(i) each reference in Subdivision 328-C (about what is a small business entity) to $10 million were instead a reference to $50 million; and

(ii) the reference in paragraph 328-110(5)(b) to a small business entity were instead a reference to an entity covered by this subsection.

40-82(4A)    

An entity is covered by this subsection for an income year in relation to an asset mentioned in subsection (2A) if:

(a) the entity starts to use the asset, or has the asset *installed ready for use, for a *taxable purpose in the period beginning on 12 March 2020 and ending on 30 June 2021; and

(b) the entity is not a *small business entity for the income year; and

(c) the entity would be a small business entity for the income year if:

(i) each reference in Subdivision 328-C (about what is a small business entity) to $10 million were instead a reference to $500 million; and

(ii) the reference in paragraph 328-110(5)(b) to a small business entity were instead a reference to an entity covered by this subsection in relation to the asset.

40-82(4B)    

An entity is covered by this subsection for an income year in relation to an amount included as mentioned in subsection (3A) if:

(a) the amount is so included in the period beginning on 12 March 2020 and ending on 31 December 2020; and

(b) the entity is not a *small business entity for the income year; and

(c) the entity would be a small business entity for the income year if:

(i) each reference in Subdivision 328-C (about what is a small business entity) to $10 million were instead a reference to $500 million; and

(ii) the reference in paragraph 328-110(5)(b) to a small business entity were instead a reference to an entity covered by this subsection in relation to the amount.

Assets you start to use, or have installed ready for use, after 30 June 2021

40-82(5)    

The decline in value of a *depreciating asset you start to use, or have *installed ready for use, for a *taxable purpose after 30 June 2021 is worked out under the other provisions of this Division.

Amounts included in second element of cost after 31 December 2020

40-82(6)    
The effect on the value of a *depreciating asset of an amount included in the second element of the asset ' s *cost after 31 December 2020 is worked out under the other provisions of this Division.