Income Tax (Transitional Provisions) Act 1997

CHAPTER 2 - LIABILITY RULES OF GENERAL APPLICATION  

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

Division 40 - Capital allowances  

Subdivision 40-BA - Backing business investment  

SECTION 40-120   Backing business investment - accelerated decline in value for businesses with turnover less than $500 million  

40-120(1)    
For the purposes of Division 40 of the Income Tax Assessment Act 1997 , the decline in value of a depreciating asset for an income year is the amount worked out under section 40-130 if:

(a)    the income year is the year in which you start to use the asset, or have it installed ready for use, for a taxable purpose; and

(b)    subsection (2) (about businesses with turnover less than $500 million) applies to you for the year and for the income year in which you started to hold the asset (if that was an earlier year); and

(c)    you are covered by section 40-125 for the asset; and

(d)    

you have not made a choice under section 40-137 in relation to the income year.

Note 1:

An effect of paragraph (1)(a) is that this Subdivision only applies to one income year per asset. See also subsection 40-135(1) .

Note 2:

This subsection does not apply if Subdivision 40-BB of this Act applies: see section 40-145 of this Act.

Businesses with turnover less than $500 million

40-120(2)    
This subsection applies to you for an income year if you:

(a)    are a small business entity; or

(b)    would be a small business entity if:

(i) each reference in Subdivision 328-C of the Income Tax Assessment Act 1997 (about what is a small business entity) to $10 million were instead a reference to $500 million; and

(ii) the reference in paragraph 328-110(5)(b) of that Act to a small business entity were instead a reference to an entity covered by this subsection.

Exception - assets for which the decline in value is worked out under section 40-82 or Subdivision 40-E or 40-F of the Income Tax Assessment Act 1997

40-120(3)    
However, this section does not apply to a depreciating asset for an income year if you work out the decline in value of the asset for the income year under any of the following:

(a)    section 40-82 of the Income Tax Assessment Act 1997 ;

(b)    Subdivision 40-E or 40-F of that Act.