Document ID: chunk:federal_register_of_legislation:C2024C00267:section:3:p13
Version: federal_register_of_legislation:C2024C00267
Segment Type: section
Provision Reference: s 3 (pt 13/50)
Character Range: 113027–115547

(5) does not apply to that asset or assets into which it is split that you continue to hold and continue to use for a taxable purpose; or
 (b) if the real asset is merged into another depreciating asset—section 40‑125 does not apply to the asset into which it is merged while you continue to hold it.

40‑40  Transport expenditure
 (1) This section applies to you if you have deducted or can deduct an amount for transport capital expenditure in respect of a transport facility under Subdivision 330‑H of the former Act, or you could have deducted an amount for the expenditure under that Subdivision if you had started to use the facility for a qualifying purpose before 1 July 2001.
 (2) Division 40 of the new Act applies to the expenditure as if it were a depreciating asset (the notional asset) you hold on this basis:
 (a) it has an opening adjustable value at 1 July 2001 equal to the total amount of transport capital expenditure under the former Act less the amounts you have deducted or can deduct for that expenditure under the former Act; and
 (b) it has a cost equal to the total amount of transport capital expenditure under the former Act; and
 (c) in applying the formula in section 40‑75 of the new Act for your income year in which 1 July 2001 occurs—you use the adjustments in subsection 40‑75(3) of the new Act; and
 (ca) it is taken to have been used for a taxable purpose at the start of 1 July 2001; and
 (d) it has an effective life at the start of 1 July 2001 equal to the years remaining for the expenditure under section 330‑395 of the former Act; and
 (e) you must use the prime cost method.
Note: There are special rules for entities that have substituted accounting periods: see section 40‑65.
 (3) Sections 40‑95 and 40‑110 of the new Act do not apply to the expenditure.
 (4) If either:
 (a) both of these subparagraphs apply:
 (i) any of the transport capital expenditure referred to in subsection (1) relates to a depreciating asset (the real asset);
 (ii) in an income year (the cessation year) you stop holding the real asset, or stop using it for a taxable purpose; or
 (b) both of these subparagraphs apply:
 (i) any of the transport capital expenditure referred to in subsection (1) relates to property that is not a depreciating asset (the other property);
 (ii) in the cessation year, the other property is disposed of, lost or destroyed, or you stop using it for a taxable purpose;
there is an additional decline in value of the notional asset for the cessation year equal to so