New Business Tax System (Capital Allowances) Act 2001 (76 of 2001)

Schedule 3   Second-hand plant

Income Tax Assessment Act 1997

2   At the end of section 42-100

Add:

Exception: plant acquired from associate

(4) For *plant that you acquire from an *associate of yours where the associate has deducted or can deduct an amount for the plant under this Division, you must use:

(a) if the associate was using the *diminishing value method - the *effective life that the associate was using; or

(b) if the associate was using the *prime cost method - an effective life equal to any period of the asset’s effective life the associate was using that is yet to elapse at the time of acquisition.

Exception: owner changes but user same or associate of former user

(5) For *plant that you acquire from a former owner or *quasi-owner of the plant where:

(a) the former owner or quasi-owner or another entity (each of which is the former user ) was using the plant at a time before you became its owner or quasi-owner; and

(b) while you are the owner or quasi-owner of the plant, the former user or an *associate of the former user uses the plant;

you must use:

(c) if the associate was using the *diminishing value method - the same *effective life that the former owner or quasi-owner was using; or

(d) if the former owner or quasi-owner was using the *prime cost method - an effective life equal to any period of the asset’s effective life the former owner or quasi-owner was using that is yet to elapse at the time of acquisition.

(6) However, you must use an *effective life determined by the Commissioner if:

(a) you do not know, and cannot readily find out, which effective life the former owner or *quasi-owner was using; or

(b) the former owner or quasi-owner did not use an effective life.