Commonwealth Consolidated Acts

INCOME TAX (TRANSITIONAL PROVISIONS) ACT 1997 - SECT 40.160

  (1)   For the purposes of Division   40 of the Income Tax Assessment Act 1997 , the decline in value of a depreciating asset you hold for an income year (the current year ) is the amount worked out under subsection   (3) if:

  (a)   you start to hold the asset at or after the 2020 budget time; and

  (b)   you start to use the asset, or have it installed ready for use, for a taxable purpose in the current year; and

  (c)   you are covered by section   40 - 150 for the asset; and

  (d)   you are covered for the current year by any of the following:

  (i)   section   40 - 155 (about businesses with turnover under $5 billion);

  (ii)   section   40 - 157 (about corporate tax entities with income under $5 billion); and

  (e)   no balancing adjustment event happens to the asset in the current year; and

  (f)   you have not made a choice under section   40 - 190 in relation to the current year.

Exclusions

  (2)   However, this section does not apply if:

  (a)   where section   40 - 155 covers you for the current year (regardless whether section   40 - 157 also covers you for the current year)--an exclusion applies to you and the asset for the current year under section   40 - 165 (about exclusions for businesses with turnover of $50 million or more); or

  (b)   where section   40 - 157 covers you for the current year (but section   40 - 155 does not):

  (i)   an exclusion applies to you and the asset for the current year under section   40 - 165; or

  (ii)   an exclusion applies to you and the asset for the current year under section   40 - 167 (about exclusions for corporate tax entities with income under $5 billion).

Amount of the decline in value

  (3)   The decline in value for the current year is:

  (a)   if the asset's start time occurs in the current year--the asset's cost as at the end of the current year, disregarding any amount included in the asset's cost after 30   June 2023; or

  (b)   if the asset's start time occurred in an earlier year--the sum of its opening adjustable value for the current year and any amount included in the second element of its cost for the current year, disregarding any amount included in the asset's cost after 30   June 2023.

Note 1:   The asset's start time is when you first use it, or have it installed ready for use, for any purpose (including a non - taxable purpose): see subsection   40 - 60(2) of the Income Tax Assessment Act 1997 .

Note 2:   A case covered by paragraph   (b) is where you start to hold the asset in the period 6   October 2020 to 30   June 2021 and use it for only non - taxable purposes in that period, then first use it for a taxable purpose in the period 1   July 2021 to 30   June 2022.