Commonwealth Consolidated Acts

INCOME TAX ASSESSMENT ACT 1997 - SECT 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

  (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).

  (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

  (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).

  (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

  (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.