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-BB - Temporary full expensing of depreciating assets  

SECTION 40-185   Balancing adjustment for assets not used or located in Australia  

40-185(1)    
This section applies if the decline in value for a depreciating asset for an income year is worked out under this Subdivision, and at a time (the balancing adjustment time ) in a later income year:

(a)    either:

(i) it becomes not reasonable to conclude that you will use the asset principally in Australia for the principal purpose of carrying on a business; or

(ii) it becomes reasonable to conclude that the asset will never be located in Australia; and

(b)    none of the requirements in paragraphs 40-295(1)(a) , (b) or (c) of the Income Tax Assessment Act 1997 are satisfied in relation to the asset.

Balancing adjustment event and termination value

40-185(2)    
For the purposes of Subdivision 40-D of the Income Tax Assessment Act 1997 assume that, at the balancing adjustment time, you stop using the asset, or having it installed ready for use, for any purpose and you expect never to use it, or have it installed ready for use, again.

Cost resulting from balancing adjustment event

40-185(3)    
For the purposes of section 40-180 of the Income Tax Assessment Act 1997 assume that the reference in item 3 of the table in subsection 40-180(2) of that Act to " because you stop using it for any purpose expecting never to use it again " were instead a reference to " because of section 40-185 of the Income Tax (Transitional Provisions) Act 1997 " .

Subdivision does not apply for income year after balancing adjustment event

40-185(4)    
If a balancing adjustment event happens to a depreciating asset you hold because of this section, this Subdivision cannot apply to work out the decline in value of the asset for a later income year.