New Business Tax System (Capital Allowances - Transitional and Consequential) Act 2001 (77 of 2001)

Schedule 2   General consequential amendments

Income Tax Assessment Act 1936

81   Subparagraph 159GJ(1)(c)(iii)

Repeal the subparagraph, substitute:

(iii) in relation to any part (in this subsection referred to as the post-application part ) of the year of income that occurs after the application period (not being a part that occurs after the commencement of a subsequent application period):

(A) the residual amount in relation to the item of eligible depreciation property at any time (in this sub-subparagraph referred to as the relevant time ) during the post-application part is an amount ascertained in accordance with the formula:

A + B - C

where:

A is the amount that, but for this application of this section, would be the residual amount at the relevant time in relation to the eligible amount (in this subparagraph referred to as the relevant eligible amount ) by reason of which the item is an item of eligible depreciation property.

B is:

(a) where paragraph (b) of this component does not apply - the amount that, in determining the residual amount in component A, would be taken into account as depreciation under subsection 159GF(1) in respect of the application period; and

(b) where, in determining the residual amount in component A, depreciation deductions taken into account in respect of the post-application part would be calculated under this Act or the Income Tax Assessment Act 1997 using the diminishing value method - the amount that, in determining the residual amount in component A, would be taken into account under subsection 159GF(1) as depreciation deductions in respect of the application period and the part of the post-application part before the relevant time; and

C is:

(a) where paragraph (a) of component B applies - an amount equal to the total notional principal in relation to the relevant eligible amount in relation to the application period; and

(b) where paragraph (b) of component B applies - the sum of:

(i) the total notional principal in relation to the relevant eligible amount in relation to the application period; and

(ii) the amount that, in determining the residual amount in component A, would be taken into account as depreciation deductions under subsection 159GF(1) in respect of the part of the post-application part before the relevant time if the depreciated value under this Act, the undeducted cost under the former Division 42 of the Income Tax Assessment Act 1997 or the adjustable value under Division 40 of that Act, of the item of eligible depreciation property at the beginning of the year of income in which this Division ceases to apply were equal to the residual amount at the beginning of the application period as reduced by the total notional principal in relation to the relevant eligible amount in relation to the application period;

(B) for the purposes of any application of this Act or the Income Tax Assessment Act 1997, in relation to the item of property in relation to the post-application part - the depreciated value, within the meaning of Division 3 of this Part, the undeducted cost under the former Division 42 of the Income Tax Assessment Act 1997 or the adjustable value under Division 40 of that Act, of the item of property at any time during the post-application part shall be taken to be an amount equal to the residual amount in relation to the relevant eligible amount at that time as ascertained in accordance with sub-subparagraph (A); and

(C) the depreciation deduction (if any) allowable to a taxpayer in relation to the item of property in relation to the post-application part is the depreciation deduction that would be allowable in respect of that period if this Division did not apply and, in the case of an item of property in relation to which paragraph 56(1)(a) of this Act or the diminishing value method under the former Division 42, or Division 40, of the Income Tax Assessment Act 1997 would, apart from this Division, apply, if the depreciated value, within the meaning of Division 3 of this Part, the undeducted cost, under the former Division 42 of the Income Tax Assessment Act 1997 or the adjustable value under Division 40 of that Act, of the item of property at the beginning of the year of income were equal to the residual amount, as ascertained under sub-subparagraph (A), in relation to the relevant eligible amount at the commencement of the post-application part;