Private ruling: Income tax: capital allowances - project pools
Published: March 2014

Ruling: The ruling concerned the following: | 1. Are the costs incurred by the company in respect of the upgrade regarded as project amounts as defined in subsection 40-840(2) of the Income Tax Assessment Act 1997 (ITAA 1997)? | 2. For the purposes of the 'entry history rule' in section 701-5 of the ITAA 1997, will the head company be taken to have incurred the costs in relation to the upgrade project amounts following the formation of the consolidated group? | 3. When the company becomes a transition taxpayer, will the tax consolidated group be entitled to deductions under Subdivision 40-I of the ITAA 1997 as modified by Subdivision 57-J of Schedule 2D of the Income Tax Assessment Act 1936 (ITAA 1936) for the upgrade project amounts that are directly connected with the project pool? | The Commissioner ruled that: | 1. Yes. The costs incurred by the company in respect of the upgrade are regarded as project amounts as defined in subsection 40-840(2) of the ITAA 1997. | 2. Yes. For the purposes of the 'entry history rule' in section 701-5 of the ITAA 1997, the head company will be taken to have incurred the costs in relation to the upgrade project amounts following the formation of the consolidated group. | 3. Yes. When the company becomes a transition taxpayer, the tax consolidated group will be entitled to deductions under Subdivision 40-I of the ITAA 1997 as modified by Subdivision 57-J of Schedule 2D of the ITAA 1936 for the upgrade project amounts that are directly connected with the project pool.