Document ID: chunk:federal_register_of_legislation:C2004A00844:clause:1_4:p6
Version: federal_register_of_legislation:C2004A00844
Segment Type: clause
Provision Reference: sch 1 cl 4 (pt 6/9)
Character Range: 100350–102993

to which Division 58 (about assets previously owned by an exempt entity) applied for an entity sale situation; and
 (b) for which you used the *diminishing value method; and
 (c) whose *adjustable value as at the end of the income year before the *current year is less than $1,000;
is also a low‑value asset.

Exception: STS

 (7) You cannot allocate a *depreciating asset to a low‑value pool if you deduct amounts for it under Subdivision 328‑D (about capital allowances for STS taxpayers).

40‑430  Rules for assets in low‑value pools

 (1) Once you have made a choice to allocate a *low‑cost asset to a low‑value pool for an income year, you must allocate all low‑cost assets you start to *hold in that income year or a later one to the pool.

Note 1: This rule does not apply to low‑value assets.

Note 2: If you are an STS taxpayer for the income year, you must deduct amounts for your depreciating assets under Subdivision 328‑D unless deductions for particular assets are specifically excluded by that Subdivision.

 (3) Once you allocate any *depreciating asset to a low‑value pool, it must remain in the pool.

40‑435  Private or exempt use of assets

  When you allocate a *depreciating asset to a low‑value pool, you must make a reasonable estimate of the percentage (the taxable use percentage) of your use of the asset (including any past use) that will be for a *taxable purpose over:
 (a) for a *low‑cost asset—its *effective life; or
 (b) for a *low‑value asset—any period of its effective life that is yet to elapse at the start of the income year for which you allocate it to the pool.

40‑440  How you work out the decline in value of assets in low‑value pools

 (1) You work out the decline in value of *depreciating assets in a low‑value pool for an income year in this way:

           Step 1. Work out the amount obtained by taking 183/4% of the taxable use percentage of the *cost of each *low‑cost asset you allocated to the pool for that year. Add those amounts.
           Step 2. Add to the step 1 amount 183/4% of the taxable use percentage of any amounts included in the second element of the *cost for that year of:

                (a) assets allocated to the pool for an earlier income year; and
                (b) *low‑value assets allocated to the pool for the *current year.

           Step 3. Add to the step 2 amount 371/2% of the sum of:

                (a) the *closing pool balance for the previous income year; and
                (b) the taxable use percentage of the *opening adjustable values of *low‑value assets, at the start of the income year, that you allocated to the pool for that