Income Tax (Transitional Provisions) Act 1997
For the purposes of Division 40 of the Income Tax Assessment Act 1997 , the decline in value of a depreciating asset you hold for an income year (the current year ) is the amount worked out under this section if: (a) either:
(i) you start to use the asset, or have it installed ready for use, for a taxable purpose in the current year; or
(b) you are covered by section 40-150 for the asset; and (c) you are covered for the current year by any of the following:
(ii) you started to use the asset, or have it installed ready for use, for a taxable purpose in an earlier income year; and
(i) section 40-155 (about businesses with turnover under $5 billion);
(d) the eligible second element worked out under section 40-175 for the asset for the year is greater than nil; and (e) no balancing adjustment event happens to the asset in the current year; and (f) you have not made a choice under section 40-190 in relation to the current year.
(ii) section 40-157 (about corporate tax entities with income under $5 billion); and
Exclusions
40-170(1A)
However, this section does not apply if: (a) section 40-157 covers you for the current year (but section 40-155 does not); and (b) an exclusion applies to you and the asset for the current year under section 40-167 (about exclusions for corporate tax entities with income under $5 billion).
Amount of the decline in value
40-170(2)
The decline in value of the asset for the current year is: (a) if the asset ' s decline in value for the year would, apart from section 40-145 , be worked out under section 40-82 of the Income Tax Assessment Act 1997 - the amount worked out under subsection (3); or (b) if the asset ' s decline in value for the year would, apart from section 40-145 , be worked out under Subdivision 40-BA of this Act - the amount worked out under subsection (4); or (c) otherwise - the amount worked out under subsection (5).
Assets affected by section 40-82 of the Income Tax Assessment Act 1997 (about assets costing less than $150,000, medium sized businesses)
40-170(3)
If this subsection applies, the amount for the current year is the sum of: (a) the amount that would be the asset ' s decline in value for the year under section 40-82 of the Income Tax Assessment Act 1997 , assuming the reference in subparagraph 40-82(3A)(b)(ii) of that Act to 31 December 2020 were instead a reference to the 2020 budget time; and (b) the eligible second element worked out under section 40-175 of this Act for the asset for the year.
Assets affected by Subdivision 40-BA (backing business investment)
40-170(4)
If this subsection applies, the amount for the current year is the sum of: (a) the amount that would be worked out under paragraph 40-130(2)(a) or (4)(a) (whichever is applicable) for the year, assuming the references in paragraphs 40-130(2)(a) and (4)(a) to 30 June 2021 were instead references to the 2020 budget time; and (b) the eligible second element worked out under section 40-175 for the asset for the year; and (c) the amount that would be worked out under paragraph 40-130(2)(b) or (4)(b) (whichever is applicable) for the year, assuming the references in paragraphs 40-130(2)(b) and (4)(b) to " the amount worked out under paragraph (a) " were instead references to " the amounts worked out under paragraphs 40-170(4)(a) and (b) " .
Other assets
40-170(5)
If this subsection applies, the amount for the current year is the sum of: (a) the amount that would be the asset ' s decline in value for the year under Division 40 of the Income Tax Assessment Act 1997 , disregarding any amounts included in the eligible second element worked out under section 40-175 of this Act for the asset for the year; and (b) the eligible second element worked out under section 40-175 for the asset for the year.
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