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

Operative provisions

SECTION 40-440  How you work out the decline in value of assets in low-value pools  

 View history reference [42-470]

40-440(1)  

You work out the decline in value of *depreciating assets in a low-value pool for an income year in this way:

Step 1. 

Work out the amount obtained by taking 18¾% of the taxable use percentage of the *cost of each *low-cost asset you allocated to the pool for that year. Add those amounts.


Step 2. 

Add to the step 1 amount 18¾% of the taxable use percentage of any amounts included in the second element of the *cost for that year of:

(a) assets allocated to the pool for an earlier income year; and
(b) *low-value assets allocated to the pool for the *current year.

Step 3. 

Add to the step 2 amount 37½% of the sum of:

(a) the *closing pool balance for the previous income year; and
(b) the taxable use percentage of the *opening adjustable values of *low-value assets, at the start of the income year, that you allocated to the pool for that year.

Step 4. 

The result is the decline in value of the *depreciating assets in the pool.

40-440(2)  

The closing pool balance of a low-value pool for an income year is the sum of:


(a) the *closing pool balance of the pool for the previous income year; and


(b) the taxable use percentage of the *costs of *low-cost assets you allocated to the pool for that year; and


(c) the taxable use percentage of the *opening adjustable values of any *low-value assets you allocated to the pool for that year as at the start of that year; and


(d) the taxable use percentage of any amounts included in the second element of the cost for the income year of:


(i) assets allocated to the pool for an earlier income year; and

(ii) low-value assets allocated to the pool for the *current year;

less the decline in value of the *depreciating assets in the pool worked out under subsection (1).

Note:

The closing pool balance may be reduced under section 40-445 if a balancing adjustment event happens.


 



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