Commonwealth Consolidated Acts Commonwealth Consolidated Acts(1) This section states the meaning of the expression an asset’s tax cost is set at a particular time at the asset’s * tax cost setting amount.
Depreciating asset provisions
(2) If any of Subdivisions 40‑A to 40‑D, sections 40‑425 to 40‑445 and Subdivision 328‑D is to apply in relation to the asset, the expression means that the provisions apply as if:
(a) the asset were * acquired at the particular time for a payment equal to its * tax cost setting amount; and
(b) at that time the same method of working out the decline in value were chosen for the asset as applied to it just before that time; and
(c) where just before that time the prime cost method applied for working out the asset’s decline in value and the asset’s tax cost setting amount does not exceed the joining entity’s * terminating value for the asset—at that time an * effective life were chosen for the asset equal to the remainder of the effective life of the asset just before that time; and
(d) where just before that time the prime cost method applied for working out the asset’s decline in value and the asset’s * tax cost setting amount exceeds the joining entity’s terminating value for the asset—the * head company were required to choose at that time an effective life for the asset in accordance with section 40‑95 (other than subsections (2) and (5)) and any choice of an effective life determined by the Commissioner were limited to one in force at that time; and
(e) where neither paragraph (c) nor (d) applies—at that time an effective life were chosen for the asset equal to the asset’s effective life just before that time.
Trading stock provisions
(3) If Division 70 is to apply in relation to the asset, the expression means that the Division applies as if the asset were * trading stock at the start of the income year in which the particular time occurs and its * value at that time were equal to its * tax cost setting amount.
Qualifying security provisions
(4) If Division 16E of Part III of the Income Tax Assessment Act 1936 is to apply in relation to the asset, the expression means that the Division applies as if the asset were acquired at the particular time for a payment equal to the asset’s * tax cost setting amount.
Capital gain and loss provisions
(5) If Part 3.1 or 3.3 is to apply in relation to the asset, the expression means that the Part applies as if the asset’s * cost base or * reduced cost base were increased or reduced so that the cost base or reduced cost base at the particular time equals the asset’s * tax cost setting amount.
Other provisions
(6) If any provision of this Act that is not mentioned above, the expression means that the provision applies as if the asset’s cost at that time were equal to its * tax cost setting amount.