Document ID: chunk:federal_register_of_legislation:C2004C01190:clause:2_244:p1
Version: federal_register_of_legislation:C2004C01190
Segment Type: clause
Provision Reference: sch 2 cl 244 (pt 1/6)
Character Range: 161579–164429

244  Division 58
Repeal the Division, substitute:

Division 58—Capital allowances for depreciating assets previously owned by an exempt entity

Table of Subdivisions

 Guide to Division 58
58‑A Application
58‑B Calculating decline in value of privatised assets under Division 40

Guide to Division 58

58‑1  What this Division is about

      This Division sets out special rules that apply in calculating deductions for the decline in value of depreciating assets and balancing adjustments for assets previously owned by an exempt entity if the assets:
                 * continue to be owned by that entity after the entity becomes taxable; or
                 * are acquired from that entity, in connection with the acquisition of a business, by a purchaser that is a taxable entity.
      There is a choice of 2 methods for each depreciating asset:
                 * the notional written down value method; and
                 * the undeducted pre‑existing audited book value method.

Subdivision 58‑A—Application

Table of sections

58‑5 Application of Division
58‑10 When an asset is acquired in connection with the acquisition of a business

58‑5  Application of Division

 (1) This Division applies in 2 situations.

Entity sale

 (2) The first (an entity sale situation) is where:
 (a) at a particular time on or after 1 July 2001, an entity is an exempt entity; and
 (b) just after that time, the entity's *ordinary income or *statutory income becomes to any extent assessable income.

 (3) In an entity sale situation:
 (a) the entity is a transition entity; and
 (b) the time when the entity's *ordinary income or *statutory income becomes to that extent assessable is the transition time; and
 (c) the income year in which the *transition time occurs is the transition year for the entity; and
 (d) the *depreciating assets the *transition entity *held just before the transition time are privatised assets.

Asset sale

 (4) The second (an asset sale situation) is where:
 (a) at a particular time on or after 1 July 2001, an entity (the purchaser) whose *ordinary income or statutory income is to any extent assessable acquires a *depreciating asset from an *exempt entity; and
 (b) the asset is acquired in connection with the acquisition of a *business from the exempt entity.

 (5) In an asset sale situation:
 (a) the *exempt entity is the tax exempt vendor; and
 (b) the time when the *depreciating asset is acquired is the acquisition time; and
 (c) the income year in which the *acquisition time occurs is the acquisition year; and
 (d) each *depreciating asset the purchaser acquires from the *tax exempt vendor at the acquisition time is a privatised asset.

58‑10  When an asset is acquired in connection with the acquisition of a business

 (1) A *depreciating asset is taken to be acquired in connection with the