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INCOME TAX (TRANSITIONAL PROVISIONS) ACT 1997 - SECT 40.345

Balancing adjustments for depreciating assets that retain CGT indexation

  (1)   The amount included in your assessable income under subsection   40 - 285(1) or 104 - 240(1) of the new Act as a result of a balancing adjustment event occurring for:

  (a)   plant that you acquired at or before 11.45 am, by legal time in the Australian Capital Territory, on 21   September 1999; or

  (b)   a depreciating asset that is not plant and that you acquired before 1   July 2001;

is reduced (but not below nil) if:

  (c)   for a paragraph   (a) case--there would have been a reduction under subsection   42 - 192(2) of the former Act as a result of that event; or

  (d)   for a paragraph   (b) case--there would have been a reduction under subsection   42 - 192(2) of the former Act as a result of that event if the asset were plant.

  (2)   The amount of the reduction is the amount worked out under subsection   42 - 192(2) of the former Act.

  (3)   There is no reduction under subsection   (1) to an amount included in your assessable income under subsection   104 - 240(1) if the balancing adjustment event results in a discount capital gain under Division   115.

  (4)   However, you can choose not to make a reduction under subsection   (1) and instead take advantage of the discount capital gain.

  (5)   Subsection   (6) applies to an entity (the transferee ) if there is roll - over relief under section   40 - 340 of the new Act as a result of a balancing adjustment event happening to a depreciating asset held by the transferee.

  (6)   Subsections   (1), (2), (3) and (4) apply also to the transferee if:

  (a)   for a depreciating asset that is plant:

  (i)   the transferor referred to in section   40 - 340 of the new Act started to hold the plant under a contract entered into at or before 11.45 am, by legal time in the Australian Capital Territory, on 21   September 1999; or

  (ii)   the transferor constructed it and the construction started at or before that time; or

  (iii)   the transferor acquired it in some other way at or before that time; or

  (iv)   the transferor acquired it from an entity that was working out the decline in value of the plant under subsection   40 - 10(3) or 40 - 12(3) of this Act and subparagraph   (i), (ii) or (iii) of this paragraph applied to that entity or to the earliest successive transferor; or

  (b)   for a depreciating asset that is not plant:

  (i)   the transferor started to hold the asset under a contract entered into before 1   July 2001; or

  (ii)   the transferor constructed it and the construction started at or before that day; or

  (iii)   the transferor acquired it in some other way before that day.


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