Document ID: chunk:federal_register_of_legislation:C2004C01190:clause:1_3:p1
Version: federal_register_of_legislation:C2004C01190
Segment Type: clause
Provision Reference: sch 1 cl 3 (pt 1/5)
Character Range: 50336–53103

3                                                                    At that time, neither of these applies:
                                                                     (a) it could reasonably be expected that, because of the plant's use, whether in connection with another asset or not, the transferee would not be a small business taxpayer for the income year following the start year or for either of the next 2 income years;
                                                                       (b) the plant is being or is intended to be let predominantly on a lease of a kind specified in subsection (5).

 (4) For the purposes of item 2 in the table in subsection (3), an entity is treated as if it is not carrying on a business in relation to the activities of a partnership in which the entity is a partner unless the entity is connected with the partnership.

 (5) A lease of plant referred to in item 3 of the table in subsection (3) is an agreement (including a renewal of an agreement) under which the holder of the plant grants a right to use the plant to another entity, but not a hire purchase agreement or a short‑term hire agreement.

 (6) The transferee works out the decline in value of the plant by:
 (a) for the diminishing value method—replacing the component in the formula in subsection 40‑70(1) of the new Act that includes the plant's effective life with the rate the transferor, or the earliest successive transferor, was using; or
 (b) for the prime cost method:
 (i) replacing the component in the formula in subsection 40‑75(1) of the new Act that includes the plant's effective life with the rate the transferor, or the earliest successive transferor, was using; and
 (ii) increasing the plant's cost under Division 42 of the former Act by any amounts included in the second element of the plant's cost after 30 June 2001.

40‑345  Balancing adjustments for depreciating assets that retain CGT indexation

 (1) The amount included in your assessable income under subsection 40‑285(1) or 104‑240(1) of the new Act as a result of a balancing adjustment event occurring for:
 (a) plant that you acquired at or before 11.45 am, by legal time in the Australian Capital Territory, on 21 September 1999; or
 (b) a depreciating asset that is not plant and that you acquired before 1 July 2001;
is reduced (but not below nil) if:
 (c) for a paragraph (a) case—there would have been a reduction under subsection 42‑192(2) of the former Act as a result of that event; or
 (d) for a paragraph (b) case—there would have been a reduction under subsection 42‑192(2) of the former Act as a result of that event if the asset were plant.

 (2) The amount of the reduction is the amount worked out under subsection 42‑192(2) of the former Act.