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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-D - Balancing adjustments    View history reference

Operative provisions

SECTION 40-362  Roll-over relief for holders of vessels covered by certificates under the Shipping Reform (Tax Incentives) Act 2012  

 View history reference

Circumstances giving rise to roll-over relief

40-362(1)  

There is roll-over relief if:


(a) there is a *balancing adjustment event under section 40-295 because you cease to *hold a *depreciating asset that is a vessel (the original vessel); and


(b) on the day that the balancing adjustment event occurs, you have a certificate for the vessel under Part 2 of the Shipping Reform (Tax Incentives) Act 2012 that:


(i) applies to that day; and

(ii) is not a *shipping exempt income certificate; and


(c) there is no roll-over relief under section 40-340 relating to the original vessel; and


(d) on the day occurring 2 years after the day you cease to hold the original vessel, you are the holder of another depreciating asset that is a vessel (the other vessel):


(i) for which you choose to apply roll-over relief in relation to the original vessel; and

(ii) for which you have a certificate under Part 2 of the Shipping Reform (Tax Incentives) Act 2012 (other than a shipping exempt income certificate) that applies to the day of that choice; and


(e) you became the holder of the other vessel during the period starting 1 year before the day you cease to hold the original vessel and ending 2 years after that day.

Choosing to apply roll-over relief

40-362(2)  

The choice must:


(a) be in writing; and


(b) be made within 6 months after the end of the second income year after the income year in which the *balancing adjustment event occurs, or within a longer period allowed by the Commissioner.

The effect of roll-over relief

40-362(3)  

If there is roll-over relief under this section:


(a) subsection 40-285(1) does not apply to the *balancing adjustment event in relation to the original vessel; and


(b) an amount is included in your assessable income if the original vessel's *termination value exceeds the sum of:


(i) the original vessel's *adjustable value just before the balancing adjustment event occurred; and

(ii) the *cost of the other vessel (disregarding paragraph (3)(c)); and


(c) for the purpose of applying this Act to the other vessel, its cost is reduced (but not below zero) by the difference between:


(i) the original vessel's termination value; and

(ii) the original vessel's adjustable value just before the balancing adjustment event occurred.

40-362(4)  

The amount included in your assessable income under paragraph (3)(b) is the amount of the excess mentioned in that paragraph. It is included in the second income year after the income year in which the *balancing adjustment event occurs.


 



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