Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES

PART 3-45 - RULES FOR PARTICULAR INDUSTRIES AND OCCUPATIONS

Division 328 - Small business entities

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Subdivision 328-D - Capital allowances for small business entities

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Special rules about roll-overs

SECTION 328-250 Deductions for assets first used in BAE year

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328-250(1)

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This section applies in working out the amount that the transferor or transferee can deduct for the BAE year under subsection 328-180(1) (assets costing less than $1,000) or subsection 328-190(2) (assets that will be pooled) for a *depreciating asset that the transferor or transferee started to use, or have *installed ready for use, for a *taxable purpose during the BAE year.

Note:

This threshold may be affected by section 328-180 (about temporary increased access to accelerated depreciation) or 328-181 (about temporary full expensing) of the Income Tax (Transitional Provisions) Act 1997 .

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History

S 328-250(1) amended by No 92 of 2020, s 3 and Sch 7 item 22, by substituting the note, effective 1 January 2021. The note formerly read:

Note:

Instead of $1,000, the threshold in subsection 328-180(1) may be $20,000, $25,000, $30,000 or $150,000 for assets first acquired between 12 May 2015 and 31 December 2020: see subsections 328-180(4) and (4A) of the Income Tax (Transitional Provisions) Act 1997 .

S 328-250(1) amended by No 61 of 2020, s 3 and Sch 4 item 17, by substituting " 31 December 2020: see subsections 328-180(4) and (4A) " for " 30 June 2020: see subsection 328-180(4) " in the note, effective 20 June 2020.

S 328-250(1) amended by No 22 of 2020, s 3 and Sch 1 item 12, by substituting " $25,000, $30,000 or $150,000 " for " $25,000 or $30,000 " in the note, effective 25 March 2020.

S 328-250(1) amended by No 51 of 2019, s 3 and Sch 1 item 5, by substituting the note, effective 1 July 2019. The note formerly read:

Note:

The threshold in subsection 328-180(1) is $20,000 (instead of $1,000) for assets first acquired between 12 May 2015 and 30 June 2019: see subsection 328-180(4) of the Income Tax (Transitional Provisions) Act 1997 .

S 328-250(1) amended by No 109 of 2018, s 3 and Sch 1 item 5, by substituting " 30 June 2019 " for " 30 June 2018 " in the note, effective 1 October 2018.

S 328-250(1) amended by No 56 of 2017, s 3 and Sch 1 item 5, by substituting " and 30 June 2018 " for " and 30 June 2017 " in the note, effective 1 July 2017.

S 328-250(1) amended by No 67 of 2015, s 3 and Sch 1 item 6, by inserting a note, effective 22 June 2015.

S 328-250(1) amended by No 96 of 2014, s 3 and Sch 4 item 5, by substituting " or subsection 328-190(2) (assets that will be pooled) " for " , subsection 328-190(2) (assets that will be pooled) or subsection 328-237(2) (certain motor vehicles) " , effective 30 September 2014. No 96 of 2014, s 3 and Sch 4 item 8 contains the following application provision:

8 Application of amendments
8(1)
The amendments made by this Schedule apply to a depreciating asset that is a motor vehicle if:

(a) the asset was first installed ready for use, for a taxable purpose, on or after the application day; or

(b) the asset was first used, for a taxable purpose, on or after the application day, but was not installed ready for use prior to the application day.

8(2)
In this item:
application day
means 1 January in the income year before the income year in which this Schedule commences.

S 328-250(1) amended by No 96 of 2014, s 3 and Sch 3 item 8, by substituting " $1,000 " for " $6,500 " , effective 30 September 2014. For application provision see note under s 328-180(1) .

S 328-250(1) amended by No 23 of 2012, s 3 and Sch 3 item 4, by substituting " , subsection 328-190(2) (assets that will be pooled) or subsection 328-237(2) (certain motor vehicles) " for " or subsection 328-190(2) (assets that will be pooled) " , applicable in relation to entities and depreciating assets the entities started to hold (as defined in section 40-40 of the Income Tax Assessment Act 1997 ) in the 2012-13 income year and later income years.

S 328-250(1) amended by No 23 of 2012, s 3 and Sch 2 item 72, by substituting " $6,500 " for " $5,000 " , applicable in relation to the 2012-13 income year and later income years.

S 328-250(1) amended by No 23 of 2012, s 3 and Sch 2 item 55, by substituting " assets costing less than $5,000 " for " low-cost assets " , applicable in relation to the 2012-13 income year and later income years.

Asset first used by transferor

328-250(2)

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If the asset was first used or *installed ready for use by the transferor, the amount that can be deducted under subsection 328-180(1) or 328-190(2) for the asset for the BAE year is split equally between:

(a) the transferor and the transferee; or

(b) if there are 2 or more occurrences of *balancing adjustment events for relevant entities for the BAE year and a roll-over is chosen for each occurrence - the entities concerned.

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Asset first used by transferee

328-250(3)

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If the asset was first used or *installed ready for use by the transferee:

(a) the transferor cannot deduct anything for the asset for the BAE year; and

(b) the amount that can be deducted under subsection 328-180(1) or 328-190(2) for the asset for the BAE year is:

(i) deductible by the transferee; or

(ii) if there are 2 or more occurrences of *balancing adjustment events for relevant entities for the BAE year and a roll-over is chosen for each occurrence - split equally between the entities concerned (except ones that did not use the asset or have it installed ready for use).

Example:

To continue the example from section 328-247 , the transferee buys an asset on the 150th day of the BAE year for $800.

On the 250th day of the year, Evan joins the transferee partnership. The new transferee partnership is a small business entity for the BAE year, and chooses to use this Subdivision for that year, and a further roll-over is chosen.

The original transferor cannot deduct anything for the asset. The original transferee (now a transferor) and the new transferee can deduct $400 each.

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Special rule for assets costing less than $1,000

328-250(4)
Subsection (5) applies if:

(a) the transferor started to use, or have *installed ready for use, an asset of a kind mentioned in paragraph 328-180(1)(b) during the BAE year; and

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(b) a *balancing adjustment event occurs for that asset before the BAE day.

Note:

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History

S 328-250(4) amended by No 92 of 2020, s 3 and Sch 7 item 23, by substituting the note, effective 1 January 2021. The note formerly read:

Note:

Instead of $1,000, the threshold in subsection 328-180(1) may be $20,000, $25,000, $30,000 or $150,000 for assets first acquired between 12 May 2015 and 31 December 2020: see subsections 328-180(4) and (4A) of the Income Tax (Transitional Provisions) Act 1997 .

S 328-250(4) amended by No 61 of 2020, s 3 and Sch 4 item 17, by substituting " 31 December 2020: see subsections 328-180(4) and (4A) " for " 30 June 2020: see subsection 328-180(4) " in the note, effective 20 June 2020.

S 328-250(4) amended by No 22 of 2020, s 3 and Sch 1 item 13, by substituting " $25,000, $30,000 or $150,000 " for " $25,000 or $30,000 " in the note, effective 25 March 2020.

S 328-250(4) amended by No 51 of 2019, s 3 and Sch 1 item 6, by substituting the note, effective 1 July 2019. The note formerly read:

Note:

The threshold in subsection 328-180(1) is $20,000 (instead of $1,000) for assets acquired between 12 May 2015 and 30 June 2019: see subsection 328-180(4) of the Income Tax (Transitional Provisions) Act 1997 .

S 328-250(4) amended by No 109 of 2018, s 3 and Sch 1 item 6, by substituting " 30 June 2019 " for " 30 June 2018 " in the note, effective 1 October 2018.

S 328-250(4) amended by No 56 of 2017, s 3 and Sch 1 item 6, by substituting " and 30 June 2018 " for " and 30 June 2017 " in the note, effective 1 July 2017.

S 328-250(4) amended by No 67 of 2015, s 3 and Sch 1 item 7, by inserting a note, effective 22 June 2015.

S 328-250(4) amended by No 23 of 2012, s 3 and Sch 2 item 58, by substituting " an asset of a kind mentioned in paragraph 328-180(1)(b) " for " a *low-cost asset " in para (a), applicable in relation to the 2012-13 income year and later income years.

328-250(5)
The transferee cannot deduct anything for the asset for the BAE year, and subsection 328-215(4) does not apply to the transferee in relation to the asset.

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