INCOME TAX (TRANSITIONAL PROVISIONS) ACT 1997 (ARCHIVE)

CHAPTER 2 - LIABILITY RULES OF GENERAL APPLICATION  

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

Division 42 - Depreciation  

SECTION 42-175 (ARCHIVE)   Meaning of undeducted cost  

42-175(1)    
In working out the undeducted cost of plant under section 42-175 of the 1997 Act, the amounts that you deduct from the cost of the plant include:

(a) for plant that is not a car - any amounts that you have deducted or can deduct for the plant under the old depreciation provisions, other than an amount that is taken by subsection 59(2E) of the 1936 Act to be depreciation allowed for the plant because of paragraph 59(2A) (a) or (b) or subsection 59(2D) of that Act; and

(b) for plant that is not a car - any further amount you could have deducted for depreciation of the plant under the old depreciation provisions for any period you owned and used it, or had it installed ready for use, assuming that:

(i) you used it wholly for the purpose of producing assessable income during that period; and

(ii) you used the same rate and method during that period as you used for the income year in which a depreciation deduction was first allowable to you for the plant; and

(iii) no provision of the 1936 Act or the 1997 Act denied a depreciation deduction for it; and

(c) if the plant is a car - the amount you could have deducted under the old depreciation provisions during any period you were its owner and used it, or had it installed ready for use, assuming that:

(i) you used it wholly for the purpose of producing assessable income during that period; and

(ii) you used the same rate and method during that period as you used for the income year in which a depreciation deduction was first allowable to you for the car; and

(iii) no provision of the 1936 Act denied a depreciation deduction for it; and

(iv) Subdivision F of Division 3 of Part III , or Schedules 2A and 2B , of the 1936 Act did not apply; and

(d) if section 58 of the 1936 Act, or Common rule 1, applied to your acquisition of the plant - the sum of the amounts that would apply under paragraphs (a), (b) and (c) to the transferor and earlier successive transferors.

42-175(2)    
If paragraph 38(3)(e) of the Taxation Laws Amendment Act (No. 3) 1992 applied to you for the plant, the amount referred to in that paragraph as being an amount that would have been allowable to you for depreciation of the plant is to be taken into account under paragraph (1)(a) of this section as an amount that you have deducted under the old depreciation provisions.

Note:

Subsection (2) applies to pre-27 February 1992 plant that was attached to a Crown Lease if you were using the prime cost method.

42-175(3)    
In working out your undeducted cost, you can apply a different rate to the rate required by subparagraphs (1)(b)(ii) and (1)(c)(ii) of this section and subparagraphs 42-175(b)(ii) and 42-175(c)(ii) of the 1997 Act for an income year for plant you acquired or constructed before 27 February 1992 if subsection (4) applies to you.

42-175(4)    
This subsection applies to you if subsection 55(5) or 55(8) of the 1936 Act (as it applied immediately before the commencement of section 1 of the Taxation Laws Amendment Act (No. 2) 1992 ) applied in working out your rate for the income year in which a depreciation deduction was first allowable to you for the plant or a later income year.

42-175(5)    
For an income year in which you did not deduct an amount for depreciation of the plant, that different rate must be one you could have used in calculating the depreciation that would have been an allowable deduction for the plant had you used it for the purpose of producing assessable income.

42-175(6)    
For any other income year, that different rate is the rate you used to deduct an amount for depreciation of the plant for that year.

Note:

The provisions of section 42-175 of the 1997 Act are replaced by other provisions in relation to a *transition entity in respect of *plant of which the entity is the owner or a *quasi-owner. Section 42-175 of this Act therefore does not have any effect in respect of such plant.