Commonwealth Numbered Acts

INCOME TAX ASSESSMENT AMENDMENT ACT (NO. 2) 1980 No. 57 of 1980 - SECT 9

9. (1) After section 57AE of the Principal Act the following section is
inserted: Limit on cost price for depreciation of motor vehicle

"57AF. (1) This section applies in relation to a unit of property (other than
an excluded unit of property) being-

   (a)  a unit of property in respect of which depreciation is allowable under
        this Act; and

   (b)  a motor vehicle (including a vehicle known as a four wheel drive
        vehicle) that is a motor car or station wagon.



"(2) Where the cost of a unit of property to which this section applies for
the purpose of calculating the depreciation allowable to a taxpayer under this
Act in relation to a year of income would, apart from this sub-section, exceed
the motor vehicle depreciation limit in relation to the year of income (in
this sub-section referred to as the 'year of first use') in which the unit of
property was first used by the taxpayer (whether for the purpose of producing
assessable income or otherwise), then, for the purpose of calculating the
depreciation allowable under this Act to the taxpayer in relation to a year of
income, the cost of that unit of property shall be deemed to be the amount of
the motor vehicle depreciation limit in relation to the year of first use.



"(3) Subject to sub-section (4), the motor vehicle depreciation limit in
relation to a year of income is $18,000.



"(4) Subject to sub-section (5), sub-section (3) has effect, in relation to a
relevant year of income, as if, for the reference in that sub-section to
$18,000, there were substituted a reference to an amount calculated by
multiplying-

   (a)  in a case to which paragraph (b) does not apply-$18,000; or

   (b)  where sub-section (3) has had effect in relation to a year of income
        or years of income preceding the relevant year of income as if a
        reference to another amount were substituted for the reference in that
        sub-section to $18,000 or would have so had effect but for the
        operation of sub- section (5)-the substituted amount or the last
        substituted amount, or the amount or the last amount that would, but
        for the operation of sub-section (5), have been so substituted, as the
        case may be, by the factor ascertained in accordance with sub-section
        (6).



"(5) Sub-section (4) does not have effect in relation to a relevant year of
income where, if it did so have effect, the motor vehicle depreciation limit
in relation to that relevant year of income would not exceed $18,000.



"(6) The factor to be ascertained for the purposes of sub-section (4) in
relation to a relevant year of income is the number (calculated to 3 decimal
places) ascertained, as at the date on which the index number for the March
quarter immediately preceding that relevant year of income was first
published, by dividing the sum of-

   (a)  the index number in respect of the March quarter immediately preceding
        that relevant year of income; and

   (b)  the index numbers in respect of the 3 quarters that immediately
        preceded that quarter, by the sum of-

   (c)  the index number in respect of the March quarter immediately preceding
        the year of income that next preceded that relevant year of income;
        and

   (d)  the index numbers in respect of the 3 quarters that immediately
        preceded that last-mentioned quarter.



"(7) Subject to sub-section (8), if at any time, whether before or after the
commencement of this section, the Australian Statistician has published or
publishes an index number in respect of a quarter in substitution for an index
number previously published by him in respect of that quarter, the publication
of the later index number shall be disregarded for the purposes of this
section.



"(8) If, at any time, whether before or after the commencement of this
section, the Australian Statistician has changed or changes the reference base
for the motor vehicle purchase sub-group of the Consumer Price Index, then,
for the purposes of the application of this section after the change took
place or takes place, regard shall be had only to index numbers published in
terms of the new reference base.



"(9) Where the factor ascertained in accordance with sub-section (6) in
relation to a relevant year of income would, if it were calculated to 4
decimal places, end with a number greater than 4, the factor ascertained in
accordance with that sub-section in relation to that relevant year of income
shall be taken to be the factor calculated to 3 decimal places in accordance
with that sub- section and increased by 0.001.



"(10) The Treasurer shall cause to be published in the Gazette before the
commencement of each relevant year of income-

   (a)  the factor ascertained in accordance with sub-section (6) (as affected
        by sub-section (9)) in relation to that year of income; and

   (b)  the amount that is to be the motor vehicle depreciation limit in
        relation to that year of income for units of property to which this
        section applies.



"(11) Where, but for this sub-section, this section would, by virtue of the
preceding provisions of this section, have effect in relation to a relevant
year of income as if, for the reference in sub-section (3) to $18,000, there
were substituted a reference to another amount, being an amount that consists
of a number of whole dollars and a number of cents (in this sub-section
referred to as the 'relevant number of cents')-

   (a)  in the case where the relevant number of cents is less than 50-the
        other amount shall be reduced by the relevant number of cents; or

   (b)  in any other case-the other amount shall be increased by the amount by
        which the relevant number of cents is less than $1.



"(12) Where, but for sub-section (5), this section would, by virtue of the
preceding provisions of this section, have effect in relation to a relevant
year of income as if, for the reference in sub-section (3) to $18,000, there
were substituted a reference to another amount, being an amount that consists
of a number of whole dollars and a number of cents (in this sub-section
referred to as the 'relevant number of cents') then, for the purposes of the
application of paragraph (b) of sub-section (4)-

   (a)  in a case where the relevant number of cents is less than 50-the other
        amount shall be reduced by the relevant number of cents; or

   (b)  in any other case-the other amount shall be increased by the amount by
        which the relevant number of cents is less than $1.



"(13) Where-

   (a)  a taxpayer disposes of a unit of property (in this sub-section
        referred to as the 'first unit of property') by sale for a
        consideration the amount or value of which (in this sub-section
        referred to as the 'reduced disposal price') is, in the opinion of the
        Commissioner, less than the market value of the first unit of property
        immediately before the time of disposal;

   (b)  depreciation under this Act has been allowed or is allowable to the
        taxpayer in relation to the first unit of property;

   (c)  the cost to the taxpayer or another person (in this sub-section
        referred to as the 'discounted cost') of acquiring ownership of
        another unit of property (in this sub-section referred to as the
        'second unit of property'), being a unit of property to which this
        section applies, is less than the amount that would otherwise have
        been the cost to the taxpayer or that other person of acquiring
        ownership of the second unit of property by reason of the allowance of
        a discount (in this sub-section referred to as the 'cost price
        discount');

   (d)  the Commissioner is satisfied, having regard to all the circumstances,
        that the whole or a part of the cost price discount (which whole or
        part, as the case may be, is in this sub-section referred to as the
        'relevant discount amount') was based on, directly or indirectly
        referable to, or fixed by reason of, the reduced disposal price of the
        first unit of property being less than the market value of the first
        unit of property immediately before the time of disposal; and

   (e)  the sum of the discounted cost and the relevant discount amount is
        greater than the motor vehicle depreciation limit in relation to the
        year of income in which the second unit of property was first used by
        the taxpayer or that other person (whether for the purpose of
        producing assessable income or otherwise), the discounted cost in
        relation to the second unit of property for the purposes of the
        application of the provisions of this Act relating to depreciation and
        the sale price of the first unit of property for the purposes of
        section 59 shall each be deemed to be increased by the relevant
        discount amount.



"(14) In this section, a reference to the market value of property at a
particular time shall, if there is insufficient evidence of the market value
at that time, be read as a reference to such amount as, in the opinion of the
Commissioner, is fair and reasonable.



"(15) In this section- 'discount', in relation to the acquisition of a unit of
property, includes any allowance that has the effect of reducing the price
payable for the acquisition of the unit of property; 'excluded unit of
property', in relation to a taxpayer, means-

   (a)  a unit of property that was acquired by the taxpayer on or before 21
        August 1979 or under a contract entered into on or before that date;

   (b)  a unit of property that was constructed by the taxpayer where the
        construction commenced on or before 21 August 1979; or

   (c)  a unit of property that was acquired by the taxpayer after 21 August
        1979 where-

        (i)    the unit of property had been acquired by a person on or before
               that date or under a contract entered into on or before that
               date; and

        (ii)   at all times after the unit of property was acquired by that
               person and before it was acquired by the taxpayer, the owner
               for the time being of the unit of property held the unit of
               property as trading stock;

'index number' in relation to a quarter, means the index number for the motor
vehicle purchase sub-group of the Consumer Price Index, being the weighted
average of the six State capital cities, published by the Australian
Statistician in respect of that quarter;

'relevant year of income' means the year of income commencing on 1 July 1980
or a subsequent year of income.".

(2) For the purposes of the application of sub-section 57AF (6) of the
Income Tax Assessment Act 1936 in relation to the year of income commencing on
1 July 1980, the reference in that sub-section to the date on which the index
number for the March quarter immediately preceding that year of income was
first published shall, if that index number has been published before the
commencement of this Act, be read as a reference to such later date as the
Commissioner determines.