Document ID: chunk:federal_register_of_legislation:C2025C00029:section:8:p11
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 8 (pt 11/13)
Character Range: 1009250–1011943

rule applies if you deducted or could have deducted amounts under former 73BA of the Income Tax Assessment Act 1936 (see section 40‑430 of the Income Tax (Transitional Provisions) Act 1997).

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 a small business entity for the income year and you calculate your deductions for your depreciating assets under Subdivision 328‑D, you must deduct amounts for your depreciating assets under that Subdivision unless deductions for particular assets are specifically excluded by that Subdivision.
 (2) 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
 (1) 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.
 (2) For the purposes of subsection (1), disregard a *taxable purpose that is the *purpose of producing assessable income:
 (a) from the use of *residential premises to provide residential accommodation; but
 (b) not in the course of carrying on a *business;
if, apart from subsections 40‑25(5) and 40‑27(6), section 40‑27 would reduce your deductions under subsection 40‑25(1) for the asset.

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