Document ID: chunk:federal_register_of_legislation:C2025C00029:section:12:p9
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 12 (pt 9/34)
Character Range: 5099082–5101776

expected to be let predominantly on a *depreciating asset lease.

Exception: assets in a low‑value or software development pool
 (7) You cannot deduct amounts for a *depreciating asset under this Subdivision if:
 (a) the asset was allocated to your low‑value pool under Subdivision 40‑E, or to your pool under the former Subdivision 42‑L, during an income year for which you were not a *small business entity or had not chosen to use this Subdivision; or
 (b) the asset is *in‑house software and expenditure on the asset is allocated to a software development pool under that Subdivision.
Note: You will have to continue deducting amounts for these assets under Division 40.
 (8) A *depreciating asset referred to in subsection (7) is not allocated to your *general small business pool under this Subdivision and does not qualify for a deduction under section 328‑180.

Exception: assets for which previously entitled to a tax offset under the R&D provisions
 (9) You cannot deduct amounts for a *depreciating asset for any period under this Subdivision if you are entitled under section 355‑100 to a *tax offset for a deduction under section 355‑305 for the asset for the same or an earlier period.

Exception: second‑hand assets used in residential property
 (9A) You cannot deduct amounts for a *depreciating asset under this Subdivision to the extent that section 40‑27 prevents you from deducting amounts under subsection 40‑25(1) for the asset.

Exception: restriction on choosing to use this Subdivision
 (10) If:
 (a) you choose to use this Subdivision to deduct amounts for your *depreciating assets for an income year; and
 (b) you do not choose to use this Subdivision for a later income year for which you satisfy the conditions to make this choice (see subsection (1));
you cannot choose to use this Subdivision until at least 5 years after the first later income year for which you satisfied the conditions to make this choice but did not do so.
Note 1: Your ability to choose to use this Subdivision may also be restricted by section 328‑440 of the Income Tax (Transitional Provisions) Act 1997.
Note 2: If you choose to use this Subdivision for an income year, you continue to use it for assets that have been allocated to your general small business pool for a later income year even if you are not a small business entity, or do not choose to use this Subdivision, for the later year: see section 328‑220.
Note 3: Subsections 328‑180(2) and (3) of the Income Tax (Transitional Provisions) Act 1997 affect the operation of this subsection in relation to income years ending on or after 12 May 2015.

328‑180  Assets costing less than $1,000
 (1) You deduct the *taxable purpose