Document ID: chunk:federal_register_of_legislation:C2025C00029:section:4:p7
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 4 (pt 7/10)
Character Range: 5807609–5810384

(5) If the total of the amounts that are or will be included in its assessable income in respect of amounts *derived under the arrangement for the leaving adjustment year and all later income years is not equal to the amount worked out under subsection (6), the amounts that are or will be included in its assessable income are adjusted so that they do equal the amount worked out under subsection (6).

Post‑leaving time proportion of total arrangement assessable income
 (6) The amount is worked out using the formula:
where:
post‑leaving time services proportion has the same meaning as in subsection (4).
total arrangement assessable income means the total of the amounts that, ignoring this Part, would be included in the separating entity's assessable income for amounts *derived by it under the arrangement for all income years.

701‑80  Accelerated depreciation
 (1) This section has effect for the head company core purposes when the entity becomes a *subsidiary member of the group.

Object
 (2) The object of this section is to preserve any entitlement to accelerated depreciation for assets that become those of the *head company because subsection 701‑1(1) (the single entity rule) applies when the entity becomes a *subsidiary member of the group. This is only to apply where the asset's *tax cost setting amount is not more than the entity's *terminating value for the asset.

Section applies to certain depreciating assets
 (3) This section applies if:
 (a) a *depreciating asset to which Division 40 applies becomes that of the *head company because subsection 701‑1(1) (the single entity rule) applies when the entity becomes a *subsidiary member of the group; and
 (b) just before the entity became a subsidiary member, subsection 40‑10(3) or 40‑12(3) of the Income Tax (Transitional Provisions) Act 1997 applied for the purpose of the entity working out the asset's decline in value under Division 40; and
Note: The effect of those subsections was to preserve an entitlement to accelerated depreciation.
 (c) the *tax cost setting amount that applies in relation to the asset for the purposes of section 701‑10 when it becomes an asset of the head company is not more than the entity's *terminating value for the asset.

Preservation of accelerated depreciation
 (4) While the asset is held by the *head company under subsection 701‑1(1) (the single entity rule), the decline in its value under Division 40 is worked out by replacing the component in the formula in subsection 40‑70(1) or 40‑75(1) that includes the asset's *effective life with the rate that would apply under subsection 42‑160(1) or 42‑165(1) of this Act if it had not been amended by the New Business Tax System (Capital Allowances) Act 2001.

701‑85  Other exceptions etc. to the rules