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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 40-30  What a depreciating asset is  

 View history reference ITAA 36

40-30(1)  

 View history reference
A depreciating asset is an asset that has a limited *effective life and can reasonably be expected to decline in value over the time it is used, except:


(a) land; or


(b) an item of *trading stock; or


(c) an intangible asset, unless it is mentioned in subsection (2).

40-30(2)  

 View history reference
These intangible assets are depreciating assets if they are not *trading stock:


(a) *mining, quarrying or prospecting rights;


(b) *mining, quarrying or prospecting information;


(ba) (Repealed by No 96 of 2014)
 View history reference


(bb) (Repealed by No 96 of 2014)
 View history reference


(c) items of *intellectual property;


(d) *in-house software;


(e) *IRUs;


(f) *spectrum licences;


(g) *datacasting transmitter licences;


(h) *telecommunications site access rights.
 View history reference

40-30(3)  

This Division applies to an improvement to land, or a fixture on land, whether the improvement or fixture is removable or not, as if it were an asset separate from the land.

Note 1:

Whether such an asset is a depreciating asset depends on whether it falls within the definition in subsection (1).

Note 2:

This Division does not apply to capital works for which you can deduct amounts under Division 43: see subsection 40-45(2).

40-30(4)  

Whether a particular composite item is itself a depreciating asset or whether its components are separate depreciating assets is a question of fact and degree which can only be determined in the light of all the circumstances of the particular case.

Example 1:

A car is made up of many separate components, but usually the car is a depreciating asset rather than each component.

Example 2:

A floating restaurant consists of many separate components (like the ship itself, stoves, fridges, furniture, crockery and cutlery), but usually these components are treated as separate depreciating assets.

40-30(5)  

This Division applies to a renewal or extension of a *depreciating asset that is a right as if the renewal or extension were a continuation of the original right.

40-30(6)  

 View history reference
This Division applies to a *mining, quarrying or prospecting right (the new right) as if it were a continuation of another mining, quarrying or prospecting right you *held if:


(a) the other right ends; and


(b) the new right and the other right relate to the same area, or any difference in area is not significant.


 



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