Income Tax Assessment Act 1997

CHAPTER 2 - LIABILITY RULES OF GENERAL APPLICATION  

PART 2-15 - NON-ASSESSABLE INCOME  

Division 58 - Capital allowances for depreciating assets previously owned by an exempt entity  

Subdivision 58-B - Calculating decline in value of privatised assets under Division 40  

SECTION 58-75   Meaning of notional written down value  

58-75(1)    
The notional written down value of a *privatised asset is its *adjustable value in the hands of:

(a) the *transition entity just before the *transition time; or

(b) the *tax exempt vendor just before the *acquisition time;

worked out using the assumptions in this section.

Application of Division 40

58-75(2)    
Assume that Division 40 had always applied to work out the decline in value of the *privatised asset.

Use for taxable purposes

58-75(3)    
Assume that, in applying Division 40 to the *privatised asset, it had always been used by the *transition entity or the *tax exempt vendor wholly for *taxable purposes.

Cost and acquisition time: exempt Australian government agency

58-75(4)    
If the *transition entity or the *tax exempt vendor was an *exempt Australian government agency just before the *transition time and had acquired the *privatised asset from another exempt Australian government agency:

(a) assume that the transition entity or tax exempt vendor acquired it at the time when it was acquired or constructed by the other exempt Australian government agency and that the first element of its *cost to the transition entity or tax exempt vendor is the amount that was its cost to the other exempt Australian government agency; or

(b) if it had, before its acquisition by the transition entity or tax exempt vendor, been successively *held by 2 or more exempt Australian government agencies - assume that:

(i) the transition entity or tax exempt vendor acquired it at the time when it was acquired or constructed by the first of those exempt Australian government agencies that owned it; and

(ii) the first element of its cost to the transition entity or tax exempt vendor is the sum of the amount that was the first element of its cost to the first of those exempt Australian government agencies that owned it and any amount included in the second element of its cost for that first agency or a later successive agency.

Effective life

58-75(5)    
Assume that:

(a) the *transition entity or the *tax exempt vendor had chosen to use an *effective life determined by the Commissioner for the *privatised asset as in force at the *transition time or the *acquisition time; and

(b) subsection 40-95(2) did not apply.

58-75(5A)    

Assume that section 40-102 did not apply to a *privatised asset unless all of the following are satisfied:

(a) it is an entity sale situation within the meaning of section 58-5 ;

(b) a *capped life applies to the asset under subsection 40-102(4) or (5) at both the asset ' s *start time and the *transition time;

(c) the *transition entity chooses, for the purposes of this section, to have section 40-102 apply to the asset.

If section 40-102 is to be applied to the asset, disregard paragraphs 40-102(2)(a) and (b) and assume that the relevant time for the purposes of the application of that section to the asset were the transition time.

58-75(6)    
Assume also that section 40-110 (about recalculating effective life) did not apply.