CHAPTER 2
-
LIABILITY RULES OF GENERAL APPLICATION
PART 2-10
-
CAPITAL ALLOWANCES: RULES ABOUT DEDUCTIBILITY OF CAPITAL EXPENDITURE
Division 40
-
Capital allowances
History
Div 40 substituted for Divs 40, 41 and 42 by No 76 of 2001.
Commissioner
'
s Remedial Power
Note:
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.
Subdivision 40-C
-
Cost
History
Subdiv 40-C inserted by No 76 of 2001.
Operative provisions
SECTION 40-215
40-215
Adjustment: double deduction
Each element of the
*
cost of a
*
depreciating asset is reduced by any portion of that element of cost that you have deducted or can deduct, or that has been or will be taken into account in working out an amount you can deduct, other than under this Division, Division
41
or Division
328
.
Note:
This section does not apply to notional deductions under section
355-305
or
355-520
(about R
&
D) because those provisions are about deducting the asset
'
s decline in value, not its cost.
History
S 40-215 (previously s 40-215(1)) amended by No 93 of 2011, s 3 and Sch 3 items 21 and 22, by omitting
"
(1)
"
before
"
Each element
"
and inserting the note at the end, effective 8 September 2011. For application, savings and transitional provisions see note under Div
355
heading.
S 40-215(1) amended by
No 31 of 2009
, s 3 and Sch 1 item 3, by inserting
"
, Division 41
"
after
"
this Division
"
, effective 22 May 2009.
S 40-215(1) amended by No 119 of 2002.
40-215(2)
(Repealed by No 93 of 2011)
History
S 40-215(2) repealed by No 93 of 2011, s 3 and Sch 3 item 23, effective 8 September 2011. For application, savings and transitional provisions see note under Div
355
heading. S 40-215(2) formerly read:
40-215(2)
Subsection (1) does not apply to deductions for research and development plant expenditure (sections
73B
and
73BA
of the
Income Tax Assessment Act 1936
).
Note:
Subsection (2) does not have the effect that deductions for the same amount of any such expenditure will be allowable under both this Division and section
73B
or
73BA
. Such an outcome is prevented by subsection
40-25(2)
(including as applied by section
73BC
for the purposes of section
73BA
) and subsections
73B(20)
and
73BA(7)
.
S 40-215(2) substituted by
No 101 of 2006
, s 3 and Sch 2 item 664, effective 14 September 2006. For application and savings provisions see the
CCH Australian Income Tax Legislation archive
. S 40-215(2) formerly read:
40-215(2)
Subsection (1) does not apply to deductions for:
(a)
research and development plant expenditure (sections
73B
and
73BA
of the
Income Tax Assessment Act 1936
); or
Note:
Paragraph (a) does not have the effect that deductions for the same amount of any such expenditure will be allowable under both this Division and section 73B or 73BA. Such an outcome is prevented by subsection
40-25(2)
(including as applied by section
73BC
for the purposes of section
73BA
) and subsections
73B(20)
and
73BA(7)
.
(b)
development and investment allowances (Subdivisions B and BA of Division 3 of Part III of that Act); or
(c)
drought investment allowance (Part XII of that Act).
S 40-215 amended by No 170 of 2001, inserted by No 76 of 2001.