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INCOME TAX ASSESSMENT ACT 1997

CHAPTER 2 - LIABILITY RULES OF GENERAL APPLICATION  

PART 2-10 - CAPITAL ALLOWANCES: RULES ABOUT DEDUCTIBILITY OF CAPITAL EXPENDITURE  

Division 40 - Capital allowances    View history reference

Subdivision 40-B - Core provisions    View history reference

Operative provisions

SECTION 40-102  Capped life of certain depreciating assets  

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40-102(1)  

If this section applies to a *depreciating asset, the effective life of the asset is the period (the capped life) that applies to the asset under subsection (4) or (5) at the relevant time (which is worked out using subsection (3)).

Working out if this section applies

40-102(2)  

This section applies to a *depreciating asset if:


(a) you choose, under paragraph 40-95(1)(a), to use an *effective life determined by the Commissioner for the asset under section 40-100; and


(b) your choice is limited to a determination in force at the time mentioned in paragraph 40-95(2)(a) or (c); and


(c) a *capped life applies to the asset under subsection (4) or (5) at the relevant time (which is worked out using subsection (3)); and


(d) the capped life is shorter than the effective life mentioned in paragraph (a).

40-102(3)  

For the purposes of this section, the relevant time is:


(a) the *start time of the *depreciating asset if:


(i) paragraph 40-95(2)(c) applies to you; or

(ii) paragraph 40-95(2)(a) applies to you and a *capped life does not apply to the asset under subsection (4) or (5) at the time mentioned in that paragraph; or

(iii) paragraph 40-95(2)(a) applies to you and the capped life that applies to the asset under subsection (4) or (5) at the time mentioned in that paragraph is longer than the capped life that applies to the asset at its start time; or


(b) if paragraph (a) does not apply - the time mentioned in paragraph 40-95(2)(a).

Capped life

40-102(4)  

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If the *depreciating asset corresponds exactly to the description in column 2 of the table, the capped life of the asset is the period specified in column 3 of the table.

Table

Capped life of certain depreciating assets
ItemKind of depreciating assetPeriod
1Aeroplane used predominantly for agricultural spraying or agricultural dusting8 years
2Aeroplane to which item 1 does not apply10 years
3Helicopter used predominantly for mustering, agricultural spraying or agricultural dusting8 years
4Helicopter to which item 3 does not apply10 years
5Bus with a *gross vehicle mass of more than 3.5 tonnes7.5 years
6Light commercial vehicle with a *gross vehicle mass of 3.5 tonnes or less and designed to carry a load of 1 tonne or more7.5 years
7Minibus with a *gross vehicle mass of 3.5 tonnes or less and designed to carry 9 or more passengers7.5 years
8Trailer with a *gross vehicle mass of more than 4.5 tonnes10 years
9Truck with a *gross vehicle mass of more than 3.5 tonnes (other than a truck that is used in *mining and quarrying operations and that is not of a kind that can be registered to be driven on a public road in the place in which the truck is operated)7.5 years
10Vessel for which you have a certificate under Part 2 of the Shipping Reform (Tax Incentives) Act 201210 years

40-102(4A)  

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Item 10 of the table in subsection 40-102(4) does not apply to a vessel if:


(a) *ordinary income that you *derive, or your *statutory income, in relation to the vessel; or


(b) ordinary income that your *associate derives, or your associate's statutory income, in relation to the vessel;

is exempt from income tax under section 51-100 for the income year for which you are working out the vessel's decline in value.

40-102(5)  

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If the *depreciating asset is of a kind described in column 2 of the table and is used in the industry specified in column 3 of the table for the asset, the capped life of the asset is the period specified in column 4 of the table.

Table

Capped life of certain depreciating assets used in specified industries
ItemKind of depreciating assetIndustry in which the asset is usedPeriod
1Gas transmission assetGas supply20 years
2Gas distribution assetGas supply20 years
3Oil production asset (other than an electricity generation asset or an offshore platform)Oil and gas extraction15 years
4Gas production asset (other than an electricity generation asset or an offshore platform)Oil and gas extraction15 years
5Offshore platformOil and gas extraction20 years
6Asset (other than an electricity generation asset) used to manufacture condensate, crude oil, domestic gas, liquid natural gas or liquid petroleum gas but not if the manufacture occurs in an oil refineryPetroleum refining15 years
7HarvesterPrimary production sector62/3 years
8TractorPrimary production sector62/3 years


 



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