Commonwealth Numbered Acts

NEW BUSINESS TAX SYSTEM (MISCELLANEOUS) ACT (NO. 1) 2000 NO. 79, 2000 - SCHEDULE 6

Income Tax Assessment Act 1997

1 Section 10-5 (table item headed "depreciation")

2 Subsection 42-20(1)

3 Subsection 42-20(1)

4 At the end of subsection 42-30(2)

; or (d) section 42-475 for plant in a ^* low-value pool.

5 After subsection 42-90(3)

(3A)

If the last entity had the ^* plant in a ^* low-value pool for the income year in which the ^* balancing adjustment event occurred, its cost may be limited to its ^* termination value.

6 Section 42-167

42-167 Plant whose cost does not exceed $300

(1)

Despite sections 42-160 and 42-165, your deduction is the ^* plant's ^* cost for the income year in which you become its owner or ^* quasi-owner if:

(a)

that cost does not exceed $300; and

(b)

you:

(i)

became the owner or quasi-owner of the plant under a contract entered into before 1 July 2000; or

(ii)

constructed it and the construction started before that day; or

(iii)

acquired it in some other way before that day.

(2)

Despite sections 42-160 and 42-165, your deduction is the ^* plant's ^* cost for the income year in which you become its owner or ^* quasi-owner (regardless of when you acquired or constructed it) if:

(a)

that cost does not exceed $300; and

(b)

you are a ^* small business taxpayer for that income year.

7 At the end of Division 42

Subdivision 42-M—Low-value pools

Guide to Subdivision 42-M

This Subdivision allows you to calculate your depreciation deductions for certain plant through a low-value pool.

Table of sections

Operative provisions

42-450 Creating a low-value pool

42-455 Allocating plant to low-value pools

42-460 Rules for plant in low-value pools

42-465 Private or exempt use of plant

42-470 Deductions for plant in low-value pools

42-475 Balancing adjustment events

[This is the end of the Guide.]

Operative provisions

You may choose to create a low-value pool by recording in writing the first income year in which you allocate ^* plant to it.

(1)

You may choose to allocate ^* low-cost plant to a ^* low-value pool for the income year in which you become its owner or ^* quasi-owner.

(2)

Low-cost plant is ^* plant whose ^* cost is less than $1,000.

(3)

You may also choose to allocate ^* plant to a ^* low-value pool for an income year if:

(a)

you have deducted or can deduct an amount for depreciation of the plant for a previous income year using the ^* diminishing value method; and

(b)

the ^* undeducted cost of the plant at the start of the income year is less than $1,000.

(1)

Once you have made a choice to allocate ^* low-cost plant to a ^* low-value pool for an income year, you must allocate all low-cost plant of which you become the owner or ^* quasi-owner in that income year or a later one to such a pool.

(2)

However, you cannot allocate any ^* plant to a ^* low-value pool for an income year if you are a ^* small business taxpayer for that year.

(3)

Once you allocate ^* plant to a ^* low-value pool, it must remain in the pool.

(4)

You cannot allocate ^* low-cost plant to a ^* low-value pool if:

(a)

its ^* cost does not exceed $300; and

(b)

you:

(i)

became the owner or ^* quasi-owner of the plant under a contract entered into before 1 July 2000; or

(ii)

constructed it and the construction started before that day; or

(iii)

acquired it in some other way before that day.

(5)

You cannot allocate ^* plant to a ^* low-value pool if you have allocated it to a pool under Subdivision 42-L.

(1)

When you allocate ^* plant to a ^* low-value pool, you must make an estimate of the percentage (if any) of your proposed use of the plant that will be for purposes other than the ^* purpose of producing assessable income.

(2)

For ^* low-cost plant, you must reduce its ^* cost by an amount representing the percentage (if any) you estimated for it under subsection (1).

(3)

For ^* plant referred to in subsection 42-455(3), you must reduce its ^* undeducted cost at the start of the income year by that percentage.

(1)

You calculate your depreciation deduction for ^* plant in a ^* low-value pool for an income year in this way:

(a)

take 18 ³ /4% of the ^* costs of ^* low-cost plant you allocated to the pool for that year; and

(b)

add to it 37 ¹ /2% of the sum of:

(i)

the ^* pool closing balance for the previous income year; and

(ii)

the ^* undeducted costs of plant, at the start of the income year, that you allocated to the pool for that year under subsection 42-455(3).

(2)

The pool closing balance of a ^* low-value pool for an income year is the sum of:

(a)

the ^* pool closing balance of the pool for the previous income year; and

(b)

the ^* costs of ^* low-cost plant you allocated to the pool for that year; and

(c)

the ^* undeducted costs of any ^* plant you allocated to the pool for that year under subsection 42-455(3) as at the start of that year;