Document ID: chunk:federal_register_of_legislation:C2010C00605:clause:9_2:p3
Version: federal_register_of_legislation:C2010C00605
Segment Type: clause
Provision Reference: sch 9 cl 2 (pt 3/5)
Character Range: 133417–136061

(a);
  are less than:
 (ii) the deductions that would have been worked out using its actual tax cost setting amount;
  then:
 (iii) if a balancing adjustment event occurs for the asset—the shortfall is allowable as a deduction to the head company for the income year in which it ceases to hold the asset; or
 (iv) if the head company ceases to hold the asset because an entity ceases to be a subsidiary member of the group—the group's allocable cost amount worked out under section 711‑30 of the Income Tax Assessment Act 1997 for the entity is increased by the shortfall.

Note: The asset's actual tax cost setting amount would be used for the purpose of working out any balancing adjustment for a balancing adjustment event or for working out the terminating value of the asset under Division 711 of the Income Tax Assessment Act 1997.

Reduced depreciation deductions etc. for acquirer from head company

 (3) If:
 (a) the asset is acquired by another entity (a new asset holder) from the head company; and
 (b) at the time of the acquisition:
 (i) either party to the acquisition controls (for value shifting purposes) the other; or
 (ii) a third entity controls (for value shifting purposes) the parties to the acquisition; and
 (c) the following amount:
 (i) the asset's adjustable value (the roll‑over adjustable value) just before the acquisition, worked out on the assumption that the head company had acquired the asset for an amount equal to the continuing majority‑owned entity's terminating value for the asset;
  is less than:
 (ii) the asset's cost to the new asset holder;
then the consequences in subsection (4) occur.

 (4) The consequences are as follows:
 (a) while the asset is held by the new asset holder, for the purpose of working out deductions for the asset's decline in value under Division 40 of the Income Tax Assessment Act 1997, the acquisition by the new asset holder is taken to have been for an amount equal to the asset's roll‑over adjustable value;
 (b) if a balancing adjustment event occurs for the asset and:
 (i) the deductions for its decline in value up to that time, worked out on the basis in paragraph (a);
  are less than:
 (ii) the deductions that would otherwise have been worked out;
  then the shortfall is allowable as a deduction to the new asset holder for the income year in which it ceases to hold the asset.

Reduced depreciation deductions etc. for entity that ceases to be a subsidiary member

 (5) If:
 (a) the asset becomes that of an entity (a new asset holder) other than the head company because subsection 701‑1(1) of the Income Tax Assessment Act 1997 ceases to apply when the