DEFENCE LEGISLATION AMENDMENT ACT (No. 2) 1990 No. 21 of 1991 - SECT 8

DEFENCE LEGISLATION AMENDMENT ACT (No. 2) 1990 No. 21 of 1991 - SECT 8

8. After section 122 of the Principal Act the following section is inserted:
Taxation consequences of disposals of assets to defence companies

"122AA. (1) This section applies where the Commonwealth disposes, or disposed,
of an asset to a company and all of the following conditions are satisfied:

   (a)  the company is:

        (i)    Australian Defence Industries Pty Ltd; or

        (ii)   Aerospace Technologies of Australia Pty Ltd;

   (b)  the disposal is under a scheme:

        (i)    for the reorganisation of defence-related activities; and

        (ii)   associated with the establishment of the company;

   (c)  the asset was acquired by the Commonwealth before 20 September 1985;

   (d)  before 20 September 1985, the asset was used, or intended for use, for
        defence-related purposes;

   (e)  the disposal took place after 7 October 1987.

"(2) For the purposes of Part IIIA of the Income Tax Assessment Act 1936, the
company is taken to have acquired the asset before 20 September 1985.

"(3) In calculating the depreciation (if any) allowable to the company under
section 54 of the Income Tax Assessment Act 1936 in respect of the asset, the
depreciated value of the asset to the company at the time of the acquisition
of the asset is the amount that would have been the depreciated value to the
Commonwealth immediately before that time if:

   (a)  the Commonwealth had been a taxpayer; and

   (b)  the asset had been used by the Commonwealth exclusively for the
        purpose of producing assessable income; and

   (c)  the following sections had never been applicable:

        (i)    the repealed sections 57AH and 57AL of the Income Tax 
               Assessment Act 1936 ;

        (ii)   those sections as they continue to apply in spite of their
               repeal by the Taxation Laws Amendment Act (No. 4) 1988.

"(4) An expression used in subsection (1) or (2) of this section and in Part
IIIA of the Income Tax Assessment Act 1936 has the same meaning in the
subsection concerned as it has in that Part.

"(5) Section 170 of the Income Tax Assessment Act 1936 does not prevent the
amendment of an assessment for the purpose of giving effect to this section.".