Document ID: chunk:federal_register_of_legislation:C2025C00029:section:2:p6
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 2 (pt 6/6)
Character Range: 857421–859932

right) as if it were a continuation of another mining, quarrying or prospecting right you *held if:
 (a) the other right ends; and
 (b) any of the following conditions are satisfied:
 (i) the new right and the other right relate to the same area, or any difference in area is not significant;
 (ii) the new right relates to an area that is a part of the area that the other right relates to.
Note: If the other right does not end, it may be taken to be split into 2 assets: see section 40‑122.
 (7) For the purposes of subsection (6), it does not matter whether the new right begins immediately after the other right ends or later (including in a later income year).

40‑35  Jointly held depreciating assets
 (1) This Division and the provisions referred to in subsection (3) apply to a *depreciating asset (the underlying asset) that you *hold, and that is also held by one or more other entities, as if your interest in the underlying asset were itself the underlying asset.
Note: Partners do not hold partnership assets: see section 40‑40.
 (2) As a result, the decline in value of the underlying asset is not itself taken into account.
Example: Buford Corp owns an office block that it leases to 2 companies, Smokey Pty Ltd and Bandit Pty Ltd. Smokey and Bandit decide to install a fountain in front of the building.
 They discuss it with Buford who agrees to pay half the cost (because the fountain won't be removable at the end of the lease). Smokey and Bandit split the rest of the cost between them.
 Smokey and Bandit would each hold the asset under item 3 of the table in section 40‑40 and Buford would hold it under item 10. They would be joint holders, so each would write‑off its interest in the fountain.
 (3) The provisions are:
 (a) Divisions 41, 328 and 775 of this Act; and
 (b) Divisions 40 and 328 of the Income Tax (Transitional Provisions) Act 1997.

40‑40  Meaning of hold a depreciating asset
  Use this table to work out who holds a *depreciating asset. An entity identified in column 3 of an item in the table as not holding a depreciating asset cannot hold the asset under another item.

Identifying the holder of a depreciating asset
Item                                            This kind of depreciating asset:                                                                                                                                                                                                                                                      Is held by this entity: