Taxation Laws Amendment Act (No. 4) 2003 (66 of 2003)

Schedule 2   Mining

Income Tax (Transitional Provisions) Act 1997

15   After section 40-285

Insert:

40-287 Disposal of pre-1 July 2001 mining depreciating asset to associate

(1) This section applies if:

(a) on or after 1 July 2001, a company (the transferor ) disposes of a depreciating asset to another company; and

(b) the companies are members of the same linked group at the time of the disposal; and

(c) apart from this section, the disposal would have resulted in:

(i) an amount (the included amount ) being included in the assessable income of the transferor under subsection 40-285(1) of the Income Tax Assessment Act 1997; and

(ii) the transferor having an additional decline in value (the deductible amount ) under subsection 40-35(5), 40-38(5) or 40-40(4) of this Act; and

(d) the included amount is more than the deductible amount.

(2) Subsection 40-35(5), 40-38(5) or 40-40(4) of this Act does not apply to the disposal.

(3) The amount that is included in the transferor's assessable income under subsection 40-285(1) of the Income Tax Assessment Act 1997 is the included amount reduced by the deductible amount.

40-288 Disposal of pre-1 July 2001 mining non-depreciating asset to associate

(1) This section applies if:

(a) on or after 1 July 2001, a company (the transferor ) disposes of property that is not a depreciating asset to another company; and

(b) the companies are members of the same linked group at the time of the disposal; and

(c) apart from this section, the disposal would have resulted in the transferor having an additional decline in value (the deductible amount ) under subsection 40-35(5), 40-37(5), 40-40(4) or 40-43(4) of this Act; and

(d) the sum of:

(i) the money the transferor receives, or is entitled to receive, in respect of the disposal; and

(ii) the market value of any other property the transferor receives, or is entitled to receive, in respect of the disposal;

is more than the deductible amount.

(2) There is no additional decline in value of the notional asset referred to in subsection 40-35(5), 40-37(5), 40-40(4) or 40-43(4) as a result of the disposal.

(3) Any amount that would be included in the transferor's assessable income under subsection 40-35(6), 40-37(6), 40-38(6), 40-40(5) or 40-43(5) of this Act, or subsection 40-830(6) of the Income Tax Assessment Act 1997, as a result of the disposal is reduced by the deductible amount.