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INCOME TAX ASSESSMENT ACT 1997 - SECT 40.440

How you work out the decline in value of assets in low-value pools

             (1)  You work out the decline in value of * depreciating assets in a low-value pool for an income year in this way:

Step 1.    Work out the amount obtained by taking 18 3 / 4 % of the taxable use percentage of the * cost of each * low-cost asset you allocated to the pool for that year. Add those amounts.

Step 2.    Add to the step 1 amount 18 3 / 4 % of the taxable use percentage of any amounts included in the second element of the * cost for that year of:

               (a)     assets allocated to the pool for an earlier income year; and

              (b)     * low-value assets allocated to the pool for the * current year.

Step 3.    Add to the step 2 amount 37 1 / 2 % of the sum of:

               (a)     the * closing pool balance for the previous income year; and

              (b)     the taxable use percentage of the * opening adjustable values of * low-value assets, at the start of the income year, that you allocated to the pool for that year.

Step 4.    The result is the decline in value of the * depreciating assets in the pool.

             (2)  The closing pool balance of a low-value pool for an income year is the sum of:

                     (a)  the * closing pool balance of the pool for the previous income year; and

                     (b)  the taxable use percentage of the * costs of * low-cost assets you allocated to the pool for that year; and

                     (c)  the taxable use percentage of the * opening adjustable values of any * low-value assets you allocated to the pool for that year as at the start of that year; and

                     (d)  the taxable use percentage of any amounts included in the second element of the cost for the income year of:

                              (i)  assets allocated to the pool for an earlier income year; and

                             (ii)  low-value assets allocated to the pool for the * current year;

less the decline in value of the * depreciating assets in the pool worked out under subsection (1).

Note:          The closing pool balance may be reduced under section 40-445 if a balancing adjustment event happens.



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