INCOME TAX (TRANSITIONAL PROVISIONS) ACT 1997 - SECT 45.40 Application of Division to plant formerly owned by exempt entities

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INCOME TAX (TRANSITIONAL PROVISIONS) ACT 1997 - SECT 45.40

Application of Division to plant formerly owned by exempt entities

(1) There are the consequences set out in this table for a transition entity that disposes of the plant, interest in plant or interest (or part) in a partnership to an entity specified in subsection (3).

Consequences for transition entities
Item
In this situation:
There are these consequences:
1
The entity chooses, under section 58 - 20, that depreciation deductions and balancing adjustments are to be calculated by reference to the notional written down value of plant
(a) section 45 - 5 has effect as if paragraph 45 - 5(2)(b) were omitted and replaced by paragraph 58 - 85(8)(a); and
(b) section 45 - 10 has effect as if paragraph 45 - 10(2)(b) operated on that part of the amount worked out under paragraph 58 - 85(8)(a) that has been or would be reflected in the entity's interest in the partnership net income or partnership loss if that amount were an amount deducted for depreciation of the plant.
2
The entity chooses, under section 58 - 20, that depreciation deductions and balancing adjustments are to be calculated by reference to the undeducted pre - existing audited book value of plant
(a) section 45 - 5 has effect as if paragraph 45 - 5(2)(b) were omitted and replaced by paragraph 58 - 145(8)(a); and
(b) section 45 - 10 has effect as if paragraph 45 - 10(2)(b) operated on that part of the amount worked out under paragraph 58 - 145(8)(a) that has been or would be reflected in the entity's interest in the partnership net income or partnership loss if that amount were an amount deducted for depreciation of the plant.

Consequences for transition entities
1	The entity chooses, under section 58 - 20, that depreciation deductions and balancing adjustments are to be calculated by reference to the notional written down value of plant	(a) section 45 - 5 has effect as if paragraph 45 - 5(2)(b) were omitted and replaced by paragraph 58 - 85(8)(a); and (b) section 45 - 10 has effect as if paragraph 45 - 10(2)(b) operated on that part of the amount worked out under paragraph 58 - 85(8)(a) that has been or would be reflected in the entity's interest in the partnership net income or partnership loss if that amount were an amount deducted for depreciation of the plant.
2	The entity chooses, under section 58 - 20, that depreciation deductions and balancing adjustments are to be calculated by reference to the undeducted pre - existing audited book value of plant	(a) section 45 - 5 has effect as if paragraph 45 - 5(2)(b) were omitted and replaced by paragraph 58 - 145(8)(a); and (b) section 45 - 10 has effect as if paragraph 45 - 10(2)(b) operated on that part of the amount worked out under paragraph 58 - 145(8)(a) that has been or would be reflected in the entity's interest in the partnership net income or partnership loss if that amount were an amount deducted for depreciation of the plant.

(2) There are the consequences set out in this table for an entity that:

(a) acquired the plant from a tax exempt vendor in connection with the acquisition of a business; and

(b) disposes of the plant, interest in plant or interest (or part) in a partnership to an entity specified in subsection (3).

Consequences for transition entities
Item
In this situation:
There are these consequences:
1
The entity chooses, under section 58 - 155, that depreciation deductions and balancing adjustments are to be calculated by reference to the notional written down value of plant
(a) section 45 - 5 has effect as if paragraph 45 - 5(2)(b) were omitted and replaced by paragraph 58 - 215(3)(a); and
(b) section 45 - 10 has effect as if paragraph 45 - 10(2)(b) operated on that part of the amount worked out under paragraph 58 - 215(3)(a) that has been or would be reflected in the entity's interest in the partnership net income or partnership loss if that amount were an amount deducted for depreciation of the plant.
2
The entity chooses, under section 58 - 155, that depreciation deductions and balancing adjustments are to be calculated by reference to the undeducted pre - existing audited book value of plant
(a) section 45 - 5 has effect as if paragraph 45 - 5(2)(b) were omitted and replaced by paragraph 58 - 270(3)(a); and
(b) section 45 - 10 has effect as if paragraph 45 - 10(2)(b) operated on that part of the amount worked out under paragraph 58 - 270(3)(a) that has been or would be reflected in the entity's interest in the partnership net income or partnership loss if that amount were an amount deducted for depreciation of the plant.

Consequences for transition entities
1	The entity chooses, under section 58 - 155, that depreciation deductions and balancing adjustments are to be calculated by reference to the notional written down value of plant	(a) section 45 - 5 has effect as if paragraph 45 - 5(2)(b) were omitted and replaced by paragraph 58 - 215(3)(a); and (b) section 45 - 10 has effect as if paragraph 45 - 10(2)(b) operated on that part of the amount worked out under paragraph 58 - 215(3)(a) that has been or would be reflected in the entity's interest in the partnership net income or partnership loss if that amount were an amount deducted for depreciation of the plant.
2	The entity chooses, under section 58 - 155, that depreciation deductions and balancing adjustments are to be calculated by reference to the undeducted pre - existing audited book value of plant	(a) section 45 - 5 has effect as if paragraph 45 - 5(2)(b) were omitted and replaced by paragraph 58 - 270(3)(a); and (b) section 45 - 10 has effect as if paragraph 45 - 10(2)(b) operated on that part of the amount worked out under paragraph 58 - 270(3)(a) that has been or would be reflected in the entity's interest in the partnership net income or partnership loss if that amount were an amount deducted for depreciation of the plant.

(3) The entities are:

(a) an exempt entity; or

(b) the trustee of a complying superannuation fund; or

(d) the trustee of a pooled superannuation trust; or

(e) an entity that is not an Australian resident; or

(f) an entity that is a State/Territory body for the purposes of Division 1AB of Part III of the Income Tax Assessment Act 1936 and whose income is exempt under that Division.

Apportionment

(4) If the entity concerned disposed of an interest in the plant rather than the plant (for a paragraph 45 - 5(2)(b) case), instead of the amount worked out under the table in subsection (1) or (2), the entity uses so much of that amount as is attributable to that interest.

(5) If the entity concerned disposed of part of its interest in the plant rather than all of it (for a paragraph 45 - 10(2)(b) case), instead of the amount worked out under the table in subsection (1) or (2), the entity uses so much of that amount as is attributable to that part of that interest.

Table of sections

50 - 1 Application of Division 50 of the Income Tax Assessment Act 1997

50 - 50 Charities established prior to 1 July 1997

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Consequences for transition entities
Item	In this situation:	There are these consequences:
1	The entity chooses, under section 58 - 20, that depreciation deductions and balancing adjustments are to be calculated by reference to the notional written down value of plant	(a) section 45 - 5 has effect as if paragraph 45 - 5(2)(b) were omitted and replaced by paragraph 58 - 85(8)(a); and (b) section 45 - 10 has effect as if paragraph 45 - 10(2)(b) operated on that part of the amount worked out under paragraph 58 - 85(8)(a) that has been or would be reflected in the entity's interest in the partnership net income or partnership loss if that amount were an amount deducted for depreciation of the plant.
2	The entity chooses, under section 58 - 20, that depreciation deductions and balancing adjustments are to be calculated by reference to the undeducted pre - existing audited book value of plant	(a) section 45 - 5 has effect as if paragraph 45 - 5(2)(b) were omitted and replaced by paragraph 58 - 145(8)(a); and (b) section 45 - 10 has effect as if paragraph 45 - 10(2)(b) operated on that part of the amount worked out under paragraph 58 - 145(8)(a) that has been or would be reflected in the entity's interest in the partnership net income or partnership loss if that amount were an amount deducted for depreciation of the plant.