Document ID: chunk:federal_register_of_legislation:C2025C00029:section:2:p3
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 2 (pt 3/6)
Character Range: 850165–852824

may have to make a further reduction for a *depreciating asset that is a *leisure facility attributable to your use of it, or your having it *installed ready for use, for a *taxable purpose.
 (4) That reduction is the part of the *leisure facility's decline in value that is attributable to your use of it, or your having it *installed ready for use, at a time when:
 (a) its use did not constitute a *fringe benefit; or
 (b) you did not use it or *hold it for use as mentioned in paragraph 26‑50(3)(b) (about using it in the course of your business or for your employees).

Exception: low‑value pools
 (5) Subsections (2), (3) and (4) do not apply to *depreciating assets allocated to a low‑value pool.
Despite subsection (1), you can continue to deduct an amount equal to the decline in value for an income year (as worked out under this Division) of such an asset even though you do not continue to *hold that asset.
Note: See Subdivision 40‑E for low‑value pools.

Meaning of taxable purpose
 (7) Subject to subsection (8), a taxable purpose is:
 (a) the *purpose of producing assessable income; or
 (b) the purpose of *exploration or prospecting; or
 (c) the purpose of *mining site rehabilitation; or
 (d) *environmental protection activities.
Note 1: Where you have had a deduction under this Division an amount may be included in your assessable income if the expenditure was financed by limited recourse debt that has terminated: see Division 243.
Note 2: When this Division notionally applies under section 355‑310 (about depreciating assets used for R&D activities), the taxable purpose is sometimes only the purpose of conducting R&D activities.
 (8) If Division 250 applies to you and an asset that is a *depreciating asset:
 (a) if section 250‑150 applies—you are taken not to be using the asset for a *taxable purpose to the extent of the *disallowed capital allowance percentage; or
 (b) otherwise—you are taken not to be using the asset for such a purpose.

40‑27  Further reduction of deduction for second‑hand assets in residential property
 (1) In addition to subsections 40‑25(2) to (4), you may have to further reduce your deduction for a *depreciating asset for the income year.
 (2) Reduce your deduction by any part of the asset's decline in value that is attributable to your use of it, or your having it *installed ready for use, for the *purpose of producing assessable income:
 (a) from the use of *residential premises to provide residential accommodation; but
 (b) not in the course of carrying on a *business;
if:
 (c) you did not *hold the asset when it was first used, or first installed ready for use, (other than as trading