Document ID: chunk:federal_register_of_legislation:C2010C00690:clause:1_3:p9
Version: federal_register_of_legislation:C2010C00690
Segment Type: clause
Provision Reference: sch 1 cl 3 (pt 9/9)
Character Range: 85132–87509

of a *consolidated group (the original group), whether or not the current group; and
 (b) an asset was continuously held by the joining entity from when it ceased to be a member of the original group until the joining time; and
 (c) when the entity ceased to be a subsidiary member of the original group, the *head company of that group made a choice under the Income Tax (Transitional Provisions) Act 1997 to increase by an amount (the transitional increase amount) the head company's *terminating value for the asset that was to be used in applying step 1 of the table in section 711‑20 of this Act; and
 (d) the asset is *over‑depreciated at the joining time;
the *tax cost setting amount for the asset, in respect of the joining entity becoming a subsidiary member of the current group, is reduced by the lesser of the transitional increase amount and the *over‑depreciation.

When an asset is over‑depreciated

 (6) An asset is over‑depreciated at a particular time if, at that time:
 (a) the asset is a *depreciating asset; and
 (b) the asset's *market value exceeds its *adjustable value; and
 (c) the asset's *cost exceeds its adjustable value.
The over‑depreciation of the asset then is the lesser of the 2 excesses (or either of them if they are the same).

Note: Unlike the position with a reduction in tax cost setting amount under section 705‑40, the amount of a reduction under this section is not re‑allocated among other assets.

705‑55  Order of application of sections 705‑40, 705‑45 and 705‑50

  If more than one of sections 705‑40, 705‑45 and 705‑50 apply:
 (a) the *head company may choose the order in which the sections are to apply; and
 (b) if it does not, the order is as follows:
 (i) first, section 705‑40;
 (ii) second, section 705‑45;
 (iii) third, section 705‑50.

How to work out the allocable cost amount

705‑60  What is the joined group's allocable cost amount for the joining entity?

  Work out the joined group's allocable cost amount for the joining entity in this way:

Working out the joined group's allocable cost amount for the joining entity
Step                                                                         What the step requires                                                                                                                                                                         Purpose of the step