Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-50 - CLIMATE CHANGE  

Division 420 - Registered emissions units  

Subdivision 420-C - Disposing of registered emissions units etc.  

SECTION 420-40   Disposal of registered emissions units for a purpose other than gaining assessable income  

420-40(1)    
If:

(a) an entity (the first entity ) incurs expenditure in:

(i) becoming the *holder of a *registered emissions unit; or

(ii) ceasing to hold a registered emissions unit; and

(b) the first entity has deducted or can deduct the expenditure under section 420-15 or 420-42 ; and

(c) the first entity ceases to hold the unit in a particular income year; and

(d) the cessation is neither:

(i) in gaining or producing the first entity ' s assessable income; nor

(ii) in carrying on a *business for the purpose of gaining or producing the first entity ' s assessable income; and

(e) section 420-30 (non-arm's length transactions and transactions with associates) did not apply to the first entity ceasing to hold the unit;

the first entity ' s assessable income for that income year includes an amount equal to the amount the first entity has deducted or can deduct.

Death

420-40(2)    
If:

(a) the first entity is an individual; and

(b) the cessation is because of the first entity ' s death; and

(c) the *registered emissions unit devolves to the first entity ' s *legal personal representative;

then:

(d) the first entity ' s legal personal representative is treated as having bought the unit for the amount included in the first entity ' s assessable income under subsection (1); and

(e) if the unit *passes to a beneficiary in the first entity ' s estate:

(i) the first entity ' s legal personal representative is treated as having disposed of the unit for the amount included in the first entity ' s assessable income under subsection (1); and

(ii) the beneficiary is treated as having bought the unit for the amount included in the first entity ' s assessable income under subsection (1).

420-40(3)    
If:

(a) the first entity is an individual; and

(b) the cessation is because of the first entity ' s death; and

(c) the *registered emissions unit *passes to a beneficiary in the first entity ' s estate without devolving to the first entity ' s *legal personal representative;

the beneficiary is treated as having bought the unit for the amount included in the first entity ' s assessable income under subsection (1).

Transfer - treatment of acquirer

420-40(4)    
If:

(a) the cessation is because of the transfer of the unit to another entity; and

(b) neither subsection (2) nor (3) applies;

the other entity is treated as having bought the unit for the amount included in the first entity ' s assessable income under subsection (1).

420-40(5)    
If subsection (4) applies to the transfer of the unit to another entity:

(a) the first entity must inform the other entity that, as a result of subsection (4) applying, the other entity is treated as having bought the unit for a particular amount; and

(b) the first entity must do so:

(i) at, or as soon as practicable after, the time of the transfer; or

(ii) by a later time allowed by the Commissioner.

Source

420-40(6)    
An amount included in the first entity ' s assessable income under subsection (1) is taken, for the purposes of the *income tax laws, to have a source in Australia.