Document ID: chunk:federal_register_of_legislation:C2004A00844:clause:1_10:p7
Version: federal_register_of_legislation:C2004A00844
Segment Type: clause
Provision Reference: sch 1 cl 10 (pt 7/13)
Character Range: 36891–39442

or
 (b) to work out the effective life of the asset yourself under section 40‑105.

 (2) Your choice of an *effective life determined by the Commissioner for a *depreciating asset is limited to one in force as at:
 (a) the time when you entered into a contract to acquire the asset, you otherwise acquired it or you started to construct it if its *start time occurs within 5 years of that time; or
 (b) for *plant that you entered into a contract to acquire, you otherwise acquired or you started to construct before 11.45 am, by legal time in the Australian Capital Territory, on 21 September 1999—the time when you entered into the contract to acquire it, otherwise acquired it or started to construct it; or
 (c) otherwise—its *start time.

 (3) You must make the choice for the income year in which the asset's *start time occurs.

Note: For rules about choices: see section 40‑130.

Exception: asset acquired from associate

 (4) For a *depreciating asset that you start to *hold where the former holder is an *associate of yours and the associate has deducted or can deduct an amount for the asset under this Division, you must use:
 (a) if the associate was using the *diminishing value method for the asset—the same *effective life that the associate was using; or
 (b) if the associate was using the *prime cost method—an effective life equal to any period of the asset's effective life the associate was using that is yet to elapse at the time you started to hold it.

Note: You can require the associate to tell you which effective life the associate was using: see section 40‑140.

Exception: holder changes but user same or associate of former user

 (5) For a *depreciating asset that you start to *hold where:
 (a) the former holder or another entity (each of which is the former user) was using the asset at a time before you became the holder; and
 (b) while you hold the asset, the former user or an *associate of the former user uses the asset;
you must use:
 (c) if the former holder was using the *diminishing value method for the asset—the same *effective life that the former holder was using; or
 (d) if the former holder was using the *prime cost method—an effective life equal to any period of the asset's effective life the former holder was using that is yet to elapse at the time you started to hold it.

 (6) However, you must use an *effective life determined by the Commissioner if:
 (a) you do not know, and cannot readily find out, which effective life the former holder was using; or
 (b) the former holder did not