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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

Commissioner ' s Remedial Power

Note: A Commissioner ' s Remedial Power (CRP 2017/2) is relevant to this part of the tax law. Taxation Administration (Remedial Power - Small Business Restructure Roll-over) Determination 2017 (F2017L01687) modifies the operation of s 40-340 of the Income Tax Assessment Act 1997 and any other provisions of a taxation law whose operation is affected by the modified operation of s 40-340 in relation to an asset transferred under a small business restructure roll-over (item 8 of the table in s 40-340(1) ).

The operation of the relevant provisions is modified as follows:

If s 40-340 of ITAA 1997 provides for rollover relief in relation to a disposal of a depreciating asset because the condition in item 8 of the table in s 40-340(1) of ITAA 1997 is satisfied in relation to the asset, that section has effect as if it also provided that the disposal of the asset has no direct consequences under the income tax law (other than Div 40 of ITAA 1997).

The modification applies in respect of transfers on or after 8 May 2018.

An entity must treat a modification as not applying to it or any other entity if the modification would produce a less favourable result for it. The Commissioner is empowered by s 370-5 of Sch 1 to the Taxation Administration Act 1953 to make modifications, by legislative instrument, to ensure the law is administered to achieve its intended purpose or object.

Subdivision 40-E - Low-value and software development pools    View history reference

Operative provisions

SECTION 40-435  Private or exempt use of assets  

 View history reference [42-465]

40-435(1)  

When you allocate a *depreciating asset to a low-value pool, you must make a reasonable estimate of the percentage (the taxable use percentage ) of your use of the asset (including any past use) that will be for a *taxable purpose over:


(a) for a *low-cost asset - its *effective life; or


(b) for a *low-value asset - any period of its effective life that is yet to elapse at the start of the income year for which you allocate it to the pool.

40-435(2)  

 View history reference
For the purposes of subsection (1), disregard a *taxable purpose that is the *purpose of producing assessable income:


(a) from the use of *residential premises to provide residential accommodation; but


(b) not in the course of carrying on a *business;

if, apart from subsections 40-25(5) and 40-27(6) , section 40-27 would reduce your deductions under subsection 40-25(1) for the asset.


 



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