INCOME TAX ASSESSMENT ACT 1997 - SECT 40.300 Meaning of termination value
INCOME TAX ASSESSMENT ACT 1997 - SECT 40.300
Meaning of termination value(1) The termination value of a * depreciating asset is worked out as at the time when the * balancing adjustment event occurs. It is:
(a) if an item in the table in subsection (2) applies--the amount specified in that item; or
(b) otherwise--the amount you are taken to have received under section 40 - 305 for the asset.
Note: Section 230 - 505 provides special rules for working out the amount of consideration for an asset if the asset is a Division 230 financial arrangement or a Division 230 financial arrangement is involved in that consideration.
(2) If more than one item applies, use the value under the last applicable item.
Termination value table | ||
Item | For this balancing adjustment event: | The termination value is: |
1 | You stop using a * depreciating asset, or having it * installed ready for use, for any purpose and you expect never to use it again even though you still * hold it | The * market value of the asset when you stopped using it or having it * installed ready for use |
2 | You decide never to use a * depreciating asset that you have not used even though you still * hold it | The * market value of the asset when you make the decision |
3 | You stop using * in - house software for any purpose and you expect never to use it again even though you still * hold it | Zero |
4 | You decide never to use * in - house software that you have not used even though you still * hold it | Zero |
5 | One or more partners stop holding a * depreciating asset when it becomes a partnership asset or a * balancing adjustment event referred to in subsection 40 - 295(2) occurs | The * market value of the asset when the partnership started to * hold it or when the balancing adjustment event occurred |
6 | You stop * holding a * depreciating asset under an * arrangement and: (a) there is at least one other party to the arrangement with whom you did not deal at * arm's length; and (b) apart from this item, the * termination value would be less than its * market value | The market value of the asset just before you stopped holding it |
7 | You stop * holding a * depreciating asset under an * arrangement that was private or domestic in nature to you (for example, a gift) | The * market value of the asset just before you stopped * holding it |
8 | A * depreciating asset is lost or destroyed | The amount or value received or receivable under an insurance policy or otherwise for the loss or destruction |
9 | You stop * holding a * depreciating asset because you die and the asset starts being held by the * legal personal representative | The asset's * adjustable value on the day you died or, if the asset is allocated to a low - value pool, so much of the * closing pool balance for the income year in which you died as is reasonably attributable to the asset |
10 | You stop * holding a * depreciating asset because it * passes directly to a beneficiary or joint tenant when you die | The * market value of the asset on the day you die |
11 | A * depreciating asset for which the * Finance Minister has determined an amount for you under section 52A of the Airports (Transitional) Act 1996 | The amount so determined |
13 | The * balancing adjustment event occurs under subsection 40 - 295(1A) | Zero |
14 | The * balancing adjustment event occurs under subsection 40 - 295(1B) | What would, apart from subsection 40 - 285(3), be the asset's * adjustable value on the day the * balancing adjustment event occurs |
(3) The termination value of a * depreciating asset does not include an amount that is included in assessable income as * ordinary income under section 6 - 5 or as * statutory income under section 6 - 10 (except an amount that is statutory income under this Division).
Note 1: Termination value may be adjusted under Subdivision 27 - B so that any GST consequences are accounted for.
Note 2: Termination value may be reduced under section 40 - 1105
to account for exploration benefits received under farm - in farm - out
arrangements.