Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-90 - CONSOLIDATED GROUPS  

Division 701 - Core rules  

Exceptions  

SECTION 701-80   Accelerated depreciation  

701-80(1)    
This section has effect for the head company core purposes when the entity becomes a ^* subsidiary member of the group.

Object

701-80(2)    
The object of this section is to preserve any entitlement to accelerated depreciation for assets that become those of the ^* head company because subsection 701-1(1) (the single entity rule) applies when the entity becomes a ^* subsidiary member of the group. This is only to apply where the asset's ^* tax cost setting amount is not more than the entity's ^* terminating value for the asset.

Section applies to certain depreciating assets

701-80(3)    

This section applies if:

(a) a ^* depreciating asset to which Division 40 applies becomes that of the ^* head company because subsection 701-1(1) (the single entity rule) applies when the entity becomes a ^* subsidiary member of the group; and

(b) just before the entity became a subsidiary member, subsection 40-10(3) or 40-12(3) of the Income Tax (Transitional Provisions) Act 1997 applied for the purpose of the entity working out the asset's decline in value under Division 40 ; and

Note:

The effect of those subsections was to preserve an entitlement to accelerated depreciation.

(c) the ^* tax cost setting amount that applies in relation to the asset for the purposes of section 701-10 when it becomes an asset of the head company is not more than the entity's ^* terminating value for the asset.

Preservation of accelerated depreciation

701-80(4)    
While the asset is held by the ^* head company under subsection 701-1(1) (the single entity rule), the decline in its value under Division 40 is worked out by replacing the component in the formula in subsection 40-70(1) or 40-75(1) that includes the asset's ^* effective life with the rate that would apply under subsection 42-160(1) or 42-165(1) of this Act if it had not been amended by the New Business Tax System (Capital Allowances) Act 2001 .