Document ID: chunk:federal_register_of_legislation:C2025C00029:section:1:p17
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 1 (pt 17/19)
Character Range: 6322214–6325066

the asset and the asset's effective life.

Subdivision 716‑G—Low‑value and software development pools

Table of sections

Assets in joining entity's low‑value pool
716‑330 Head company's deductions for decline in value of assets in joining entity's low‑value pool

Entity leaving group with asset allocated to head company's low‑value pool
716‑335 Entity leaving group with asset allocated to head company's low‑value pool

Depreciating assets arising from expenditure in joining entity's software development pool
716‑340 Depreciating assets arising from expenditure in joining entity's software development pool

Software development pools if entity leaves consolidated group
716‑345 Head company taken not to have incurred expenditure

Assets in joining entity's low‑value pool

716‑330  Head company's deductions for decline in value of assets in joining entity's low‑value pool
 (1) This section modifies the operation of sections 40‑430, 40‑435, 40‑440, 40‑445, 701‑10 and 701‑60 and Division 705 for the head company core purposes mentioned in section 701‑1 if:
 (a) an entity (the joining entity) becomes a *subsidiary member of a *consolidated group at a time (the joining time); and
 (b) there are one or more *depreciating assets (the previous pool assets) that:
 (i) were allocated to the joining entity's low‑value pool; and
 (ii) become assets of the *head company of the group at the joining time because section 701‑1 applies to the joining entity; and
 (c) none of the previous pool assets was an asset to which Division 58 applied to affect the joining entity's deductions relating to the asset.
Note 1: Sections 40‑430, 40‑435 and 40‑440 are relevant to allocating depreciating assets to a low‑value pool and to working out the decline in value of assets allocated to a low‑value pool. Section 40‑445 affects the closing pool balance, and may give rise to assessable income, if a balancing adjustment event happens to such an asset.
Note 2: Section 701‑10 provides that, for each asset the joining entity has at the joining time, the asset's tax cost is set at the joining time at the asset's tax cost setting amount, which is defined by section 701‑60 as the amount worked out under Division 705.
Note 3: Division 58 is about capital allowances for depreciating assets previously owned by an exempt entity.

Objects
 (2) The main objects of this section are:
 (a) to clarify how sections 40‑430, 40‑435 and 40‑440 operate in relation to the previous pool assets; and
 (b) to reduce compliance costs by providing that the *tax cost is set for all the previous pool assets in one operation, rather than individually for each such asset.

Time of allocation of assets to head company's low‑value pool
 (3) Sections 40‑430, 40‑435, 40‑440 and 40‑445 operate as if the *head company of the *consolidated group allocated the previous pool