Income Tax (Transitional Provisions) Act 1997 (Cth)

Income Tax (Transitional Provisions) Act 1997

No. 40, 1997

Compilation No. 100

Compilation date: 1 April 2025

Includes amendments: Act No. 29, 2025

About this compilation

This compilation

This is a compilation of the Income Tax (Transitional Provisions) Act 1997 that shows the text of the law as amended and in force on 1 April 2025 (the compilation date).

The notes at the end of this compilation (the endnotes) include information about amending laws and the amendment history of provisions of the compiled law.

Uncommenced amendments

The effect of uncommenced amendments is not shown in the text of the compiled law. Any uncommenced amendments affecting the law are accessible on the Register ( The details of amendments made up to, but not commenced at, the compilation date are underlined in the endnotes. For more information on any uncommenced amendments, see the Register for the compiled law.

Application, saving and transitional provisions for provisions and amendments

If the operation of a provision or amendment of the compiled law is affected by an application, saving or transitional provision that is not included in this compilation, details are included in the endnotes.

Editorial changes

For more information about any editorial changes made in this compilation, see the endnotes.

Modifications

If the compiled law is modified by another law, the compiled law operates as modified but the modification does not amend the text of the law. Accordingly, this compilation does not show the text of the compiled law as modified. For more information on any modifications, see the Register for the compiled law.

Self‑repealing provisions

If a provision of the compiled law has been repealed in accordance with a provision of the law, details are included in the endnotes.

Contents

An Act setting out application and transitional provisions for the Income Tax Assessment Act 1997

Chapter 1Introduction and core provisionsPart 1‑1PreliminaryDivision 1Preliminary

Table of sections

1‑1 Short title
1‑5 Commencement
1‑7 Administration of this Act
1‑10 Definitions and rules for interpreting this Act

1‑1Short title

This Act may be cited as the Income Tax (Transitional Provisions) Act 1997.

1‑5Commencement

This Act commences on 1 July 1997.

1‑7Administration of this Act

The Commissioner has the general administration of this Act.
Note: An effect of this provision is that people who acquire information under this Act are subject to the confidentiality obligations and exceptions in Division 355 in Schedule 1 to the Taxation Administration Act 1953.

1‑10Definitions and rules for interpreting this Act

(1)
In this Act, an expression has the same meaning as in the Income Tax Assessment Act 1997.
(2)
Division 950 of the Income Tax Assessment Act 1997 (which contains rules for interpreting that Act) applies to this Act as if the provisions of this Act were provisions of that Act.

Part 1‑3Core ProvisionsDivision 4How to work out the income tax payable on your taxable income

Table of sections

4‑1 Application of the Income Tax Assessment Act 1997
4‑11 Temporary budget repair levy

4‑1Application of the Income Tax Assessment Act 1997

The Income Tax Assessment Act 1997, as originally enacted, applies to assessments for the 1997‑98 income year and later income years.
Note: For the application of amendments of that Act (including new provisions inserted in it), see the Acts making the amendments.

4‑11Temporary budget repair levy

Temporary budget repair levy
(1)
You must pay extra income tax (temporary budget repair levy) for a financial year if:
(a)
you are an individual; and
(b)
your taxable income for the corresponding income year exceeds $180,000; and
(c)
the financial year is a temporary budget repair levy year.
Note: This section will also affect the income tax payable by some trustees who are taxed as if certain trust income were income of individuals. See sections 98 and 99 of the Income Tax Assessment Act 1936.
Amount of temporary budget repair levy
(2)
Your temporary budget repair levy is worked out by reference to your taxable income for the corresponding income year using the rate or rates that apply to you.
Interaction with other provisions
(3)
For the purpose of working out your income tax for the financial year:
(a)
section 4‑10 of the Income Tax Assessment Act 1997 has effect as if it made you liable to pay the extra tax mentioned in subsection (1) of this section; and
(b)
subsection 4‑10(3) of that Act has effect as if step 4 of the method statement in that subsection were omitted and the following were substituted:
Step 3A.Subtract your tax offsets from your basic income tax liability.
For the list of tax offsets, see section 13‑1.
Step 3B. Add the extra income tax you must pay as mentioned in subsection 4‑11(1) of the Income Tax (Transitional Provisions) Act 1997.
Step 4. If an amount of your tax offset for foreign income tax under Division 770 remains after applying section 63‑10, subtract the remaining amount from the result of step 3B. The result is how much income tax you owe for the financial year.
(4)
To avoid doubt, temporary budget repair levy is not included in your basic income tax liability.
Note: As a result, you cannot apply any tax offsets against temporary budget repair levy under Part 2‑20 of the Income Tax Assessment Act 1997 (apart from the foreign income tax offset applied under step 4 of the method statement in subsection (3)).
Meaning of temporary budget repair levy year
(5)
Each of the following is a temporary budget repair levy year:
(a)
the 2014‑15 financial year;
(b)
the 2015‑16 financial year;
(c)
the 2016‑17 financial year.

Division 5How to work out when to pay your income tax

Table of Subdivisions

5‑A How to work out when to pay your income tax

Subdivision 5‑AHow to work out when to pay your income tax

Table of sections

5‑5 Application of Division 5 of the Income Tax Assessment Act 1997
5‑7 References in tax sharing agreements to former section 204
5‑10 General interest charge liabilities under former subsection 204(3)
5‑15 Application of section 5‑15 of the Income Tax Assessment Act 1997

5‑5Application of Division 5 of the Income Tax Assessment Act 1997

Subject to section 5‑15 of this Act, Division 5 of the Income Tax Assessment Act 1997, as originally enacted, applies in relation to income tax or shortfall interest charge you must pay for:
(a)
the 2010‑11 financial year; or
(b)
a later financial year.

5‑7References in tax sharing agreements to former section 204

(1)
A reference in an agreement to section 204 of the Income Tax Assessment Act 1936 is taken, from the commencement of this section, to be a reference to section 5‑5 of the Income Tax Assessment Act 1997, if:
(a)
paragraph 721‑25(1)(a) of the Income Tax Assessment Act 1997 applies to the agreement; and
(b)
the agreement was in force just before the commencement of this section.
(2)
This section applies in relation to tax to which Division 5 of the Income Tax Assessment Act 1997 applies.

5‑10General interest charge liabilities under former subsection 204(3)

(1)
This section applies if, just before the commencement of this section, you were liable, under subsection 204(3) (the old provision) of the Income Tax Assessment Act 1936, to pay the general interest charge on an unpaid amount (the liability) of any tax or shortfall interest charge.
(2)
On that commencement, the old provision ceases to apply to the liability.
(3)
From that commencement, section 5‑15 (the new provision) of the Income Tax Assessment Act 1997, as originally enacted, applies to the liability as if:
(a)
the liability remained unpaid at that time; and
(b)
so much of the charge under the old provision as remained unpaid at that time had been imposed under the new provision and remained unpaid at that time.

5‑15Application of section 5‑15 of the Income Tax Assessment Act 1997

(1)
Section 5‑15 of the Income Tax Assessment Act 1997 (General interest charge payable on unpaid income tax or shortfall interest charge), as originally enacted, applies to an amount of income tax or shortfall interest charge you must pay for a financial year, if the income tax or shortfall interest charge is due to be paid on or after the commencement of that section.
(2)
For the purposes of subsection (1), it does not matter whether the financial year ended before, on or after the commencement of that section.

Division 6Assessable income and exempt income

Table of sections

6‑2 Effect of this Division
6‑3 Assessable income for income years before 1997‑98
6‑20 Exempt income for income years before 1997‑98

6‑2Effect of this Division

This Division has effect for the purposes of the Income Tax Assessment Act 1997 and of this Act.

6‑3Assessable income for income years before 1997‑98

For the 1996‑97 income year or an earlier income year, assessable income means all the amounts that under the Income Tax Assessment Act 1936 are included in the assessable income.

6‑20Exempt income for income years before 1997‑98

For the 1996‑97 income year or an earlier income year, exempt income means income which is exempt from tax and includes income which is not assessable income.

Division 8Deductions

Table of sections

8‑2 Effect of this Division
8‑3 Deductions for income years before 1997‑98
8‑10 No double deductions for income year before 1997‑98 and income year after 1996‑97

8‑2Effect of this Division

This Division has effect for the purposes of the Income Tax Assessment Act 1997 and of this Act.

8‑3Deductions for income years before 1997‑98

For the 1996‑97 income year or an earlier income year, deduction means a deduction allowable under the Income Tax Assessment Act 1936.

8‑10No double deductions for income year before 1997‑98 and income year after 1996‑97

If:
(a)
a provision of the Income Tax Assessment Act 1936 allows you a deduction in respect of an amount for the 1996‑97 income year or an earlier income year; and
(b)
a different provision of that Act, or a provision of the Income Tax Assessment Act 1997, allows you a deduction in respect of the same amount for the 1997‑98 income year or a later income year;
you can deduct only under the provision that is most appropriate.

Chapter 2Liability rules of general applicationPart 2‑1Assessable incomeDivision 15Some items of assessable income

Table of sections

15‑1 General application provision
15‑10 Application of section 15‑10 of the Income Tax Assessment Act 1997 to bounties and subsidies
15‑15 Application of section 15‑15 of the Income Tax Assessment Act 1997 to profit‑making plans
15‑20 Application of section 15‑20 of the Income Tax Assessment Act 1997 to royalties
15‑30 Application of section 15‑30 of the Income Tax Assessment Act 1997 to insurance or indemnity payments
15‑35 Application of section 15‑35 of the Income Tax Assessment Act 1997 to interest on overpayments and early payments of tax

15‑1General application provision

(1)
Division 15 of the Income Tax Assessment Act 1997 applies to assessments for the 1997‑98 income year and later income years.
(2)
However, the sections of that Act listed in the table apply in accordance with the corresponding sections of this Act.

Application provisions for specific sections
Item	This section of the Income Tax Assessment Act 1997 ...	Applies as described in this section of this Act ...
1	15‑10	15‑10
2	15‑15	15‑15
3	15‑20	15‑20
4	15‑30	15‑30
5	15‑35	15‑35

15‑10Application of section 15‑10 of the Income Tax Assessment Act 1997 to bounties and subsidies

Section 15‑10 (Bounties and subsidies) of the Income Tax Assessment Act 1997 applies to a bounty or subsidy received in the 1997‑98 income year or a later income year.

15‑15Application of section 15‑15 of the Income Tax Assessment Act 1997 to profit‑making undertaking or plan

Section 15‑15 (Profit‑making undertaking or plan) of the Income Tax Assessment Act 1997 applies to a profit arising in the 1997‑98 income year or a later income year, even if the undertaking or plan was entered into, or began to be carried on or carried out, before the 1997‑98 income year.

15‑20Application of section 15‑20 of the Income Tax Assessment Act 1997 to royalties

Section 15‑20 (Royalties) of the Income Tax Assessment Act 1997 applies to an amount received as or by way of royalty in the 1997‑98 income year or a later income year.

15‑30Application of section 15‑30 of the Income Tax Assessment Act 1997 to insurance or indemnity payments

Section 15‑30 (Insurance or indemnity for loss of assessable income) of the Income Tax Assessment Act 1997 applies to an amount received in the 1997‑98 income year or a later income year as insurance or indemnity for the loss at any time of an amount that would have been assessable income under the Income Tax Assessment Act 1936 or the Income Tax Assessment Act 1997.

15‑35Application of section 15‑35 of the Income Tax Assessment Act 1997 to interest on overpayments and early payments of tax

Section 15‑35 (Interest on overpayments and early payments of tax) of the Income Tax Assessment Act 1997 applies to interest that is paid or applied in the 1997‑98 income year or a later income year, even if some or all of the interest became payable earlier.

Division 20Items included to reverse the effect of past deductions

Table of Subdivisions

20‑A Insurance, indemnity or recoupment for deductible expenses
20‑B Disposal of a car for which lease payments have been deducted

Subdivision 20‑AInsurance, indemnity or recoupment for deductible expenses

Table of sections

20‑1 Application of Subdivision 20‑A of the Income Tax Assessment Act 1997

20‑1Application of Subdivision 20‑A of the Income Tax Assessment Act 1997

Subdivision 20‑A of the Income Tax Assessment Act 1997 applies to an assessable recoupment received in the 1997‑98 income year or a later income year of a loss or outgoing whenever incurred.

Subdivision 20‑BDisposal of a car for which lease payments have been deducted

Table of sections

20‑100 Application of Subdivision 20‑B of the Income Tax Assessment Act 1997
20‑105 The cost of a car acquired in the 1996‑97 income year or an earlier income year
20‑110 The termination value of a car disposed of in the 1996‑97 income year or an earlier income year
20‑115 Reducing the assessable amount for the disposal of a car in the 1997‑98 income year or later if there has been an earlier disposal of it

20‑100Application of Subdivision 20‑B of the Income Tax Assessment Act 1997

Subdivision 20‑B of the Income Tax Assessment Act 1997 applies to assessments for the 1997‑98 income year and later income years.

20‑105The cost of a car acquired in the 1996‑97 income year or an earlier income year

(1)
If:
(a)
in the 1997‑98 income year or a later income year you dispose of a car that was leased to you or your associate; and
(b)
the lessor acquired the car in the 1996‑97 income year or an earlier income year;
the cost of the car to the lessor for the purposes of section 20‑120 of the Income Tax Assessment Act 1997 is worked out under the depreciation provisions of the Income Tax Assessment Act 1936.
Note 1: Section 20‑120 of the Income Tax Assessment Act 1997 is about a limit on the amount to be included in your assessable income because of your disposal of the car.
Note 2: The depreciation provisions were in Subdivision A of Division 3 of Part III of the Income Tax Assessment Act 1936.
(2)
In working out the cost of the car to the lessor, disregard any election the lessor made under former subsection 59(2A) or (2D) of the Income Tax Assessment Act 1936 to reduce the cost of the car.

20‑110The termination value of a car disposed of in the 1996‑97 income year or an earlier income year

If:
(a)
in the 1997‑98 income year or a later income year you dispose of a car that was leased to you or your associate; and
(b)
the lessor disposed of the car in the 1996‑97 income year or an earlier income year;
the car’s termination value (in respect of the disposal by the lessor) for the purposes of section 20‑120 of the Income Tax Assessment Act 1997 is the consideration receivable by the lessor for the disposal (worked out under former section 59 of the Income Tax Assessment Act 1936).
Note: Section 20‑120 of the Income Tax Assessment Act 1997 is about a limit on the amount to be included in your assessable income because of your disposal of the car.

20‑115Reducing the assessable amount for the disposal of a car in the 1997‑98 income year or later if there has been an earlier disposal of it

If:
(a)
section 20‑110 or 20‑125 of the Income Tax Assessment Act 1997 includes an amount in your assessable incomefor the 1997‑98 income year or a later income year because of your disposal of a car; and
(b)
in the 1996‑97 income year or an earlier income year (but after the lease period began) there was an earlier disposal of the car, or an interest in it, by you or another entity in a situation described in the following table;
each limit on the amount to be included in your assessable income is reduced as follows:

Reducing each limit on the amount to be included
Item	In this situation:	reduce each limit by:
1	Former section 26AAB of the Income Tax Assessment Act 1936 included an amount in your assessable income in respect of such an earlier disposal by you	that amount
2	Former section 26AAB of the Income Tax Assessment Act 1936 included an amount in another entity’s assessable income in respect of such an earlier disposal by the other entity	that amount
3	Former section 26AAB of the Income Tax Assessment Act 1936 would have included an amount in your assessable income in respect of such an earlier disposal by you but for the operation of former subsection 26AAB(12) of that Act	that amount
4	Former section 26AAB of the Income Tax Assessment Act 1936 would have included an amount in another entity’s assessable income in respect of such an earlier disposal by the other entity but for the operation of former subsection 26AAB(12) of that Act	that amount
5	Former subsection 26AAB(9) of the Income Tax Assessment Act 1936 reduced the amount to be included in your assessable income in respect of such an earlier disposal by you	the amount of the reduction
6	Former subsection 26AAB(9) of the Income Tax Assessment Act 1936 reduced the amount to be included in another entity’s assessable income in respect of such an earlier disposal by the other entity	the amount of the reduction

Part 2‑5Rules about deductibility of particular kinds of amountsDivision 25Some amounts you can deduct

Table of sections

25‑1 Application of Division 25 of the Income Tax Assessment Act 1997
25‑40 Application of section 25‑40 of the Income Tax Assessment Act 1997
25‑45 Application of section 25‑45 of the Income Tax Assessment Act 1997
25‑50 Application of section 25‑90of the Income Tax Assessment Act 1997
25‑65 Local government election expenses

25‑1Application of Division 25 of the Income Tax Assessment Act 1997

Division 25 (Some amounts you can deduct) of the Income Tax Assessment Act 1997 applies to assessments for the 1997‑98 income year and later income years, except as provided by this Division.

25‑40Application of section 25‑40 of the Income Tax Assessment Act 1997

Section 25‑40 (Loss from profit‑making undertaking or plan) of the Income Tax Assessment Act 1997 applies to a loss arising in the 1997‑98 income year or a later income year, even if the undertaking or plan was entered into, or began to be carried on or carried out, before the 1997‑98 income year.

25‑45Application of section 25‑45 of the Income Tax Assessment Act 1997

Section 25‑45 (which is about deductions for losses by theft etc.) of the Income Tax Assessment Act 1997 applies to a loss discovered in the 1997‑98 income year or a later income year.

25‑50Application of section 25‑90 of the Income Tax Assessment Act 1997

Section 25‑90 (which is about deductions relating to foreign exempt income) of the Income Tax Assessment Act 1997 applies to an amount incurred in an income year that begins on or after 1 July 2001.

25‑65Local government election expenses

Section 25‑65 of the Income Tax Assessment Act 1997 applies to the 2006‑07 income year and later income years, in relation to expenditure whenever incurred. In relation to expenditure incurred in the 2005‑06 income year or an earlier income year, it applies as if:

(a)
it had applied to all income years before the 2006‑07 income year; and
(b)
an allowable deduction for the expenditure under section 74A of the Income Tax Assessment Act 1936 had been a deduction for the expenditure under section 25‑65 of the Income Tax Assessment Act 1997.
Note: This section also has the result that, to the extent that a recoupment of the expenditure has been included in your assessable income by former subsections 74A(4) and (5) of the Income Tax Assessment Act 1936, the expenditure will be disregarded in applying the $1,000 per election deduction limit: see subsection 25‑65(2) of the Income Tax Assessment Act 1997.

Division 26Some amounts you cannot deduct, or cannot deduct in full

Table of sections

26‑1 Application of Division 26 of the Income Tax Assessment Act 1997
26‑30 Application of section 26‑30 of the Income Tax Assessment Act 1997

26‑1Application of Division 26 of the Income Tax Assessment Act 1997

Division 26 of the Income Tax Assessment Act 1997 (which prevents or limits deductions) applies to assessments for the 1997‑98 income year and later income years, except as provided by this Division.

26‑30Application of section 26‑30 of the Income Tax Assessment Act 1997

Section 26‑30 (which denies a deduction for relative’s travel expenses) of the Income Tax Assessment Act 1997 applies to travel on or after 1 July 1997.

Division 30Gifts or contributions

Table of sections

30‑1 Application of Division 30 of the Income Tax Assessment Act 1997
30‑5 Keeping in force old declarations and instruments
30‑25 Keeping in force the old gifts registers
30‑102 Fund, authorities and institutions taken to be endorsed

30‑1Application of Division 30 of the Income Tax Assessment Act 1997

Division 30 of the Income Tax Assessment Act 1997 applies to assessments for the 1997‑98 income year and later income years.

30‑5Keeping in force old declarations and instruments

(1)
This section applies to a declaration or other instrument (described in column 2 of an item in the table in this section) that is in force at the end of 30 June 1997 for the purposes of the provision of the Income Tax Assessment Act 1936 referred to in that column of the item.
(2)
On and after 1 July 1997 the declaration or other instrument also has effect as if it were an approval or declaration (described in column 3 of the same item) made for the purposes of the provision of the Income Tax Assessment Act 1997 referred to in that column of the item.
Anything done on or after 1 July 1997 in relation to an approval or declaration described in column 3 of an item in the table also has effect as if it had been done in relation to the declaration or other instrument described in column 2 of that item.

On and after 1 July 1997
Item	This approval, declaration or other instrument:	also has effect as if it were:
1	An instrument certifying an institution to be a technical and further education institution for the purposes of item 2.1.7 of table 2 in subsection 78(4)	A declaration that the institution is a technical and further education institution for the purposes of item 2.1.7 of the table in subsection 30‑25(1)
2	An instrument certifying that purposes of an institution covered by item 2.1.7 of table 2 in subsection 78(4), or of the college covered by item 2.2.14 of that table, relate exclusively to tertiary education	A declaration (for the purposes of section 30‑30) that those purposes of the institution, or of the college, relate solely to tertiary education
3	An instrument approving an organisation, or a branch or section of an organisation, to be a marriage guidance organisation for the purposes of item 8.1.1 of table 8 in subsection 78(4)	A declaration that the organisation, or branch or section of the organisation, is a marriage guidance organisation for the purposes of item 8.1.1 of the table in subsection 30‑70(1)
4	A declaration that a public fund is an eligible fund for the purposes of item 9.1.1 of table 9 in subsection 78(4)	A declaration that the public fund is a relief fund for the purposes of item 9.1.1 of the table in subsection 30‑80(1)
5	An instrument approving a person as a valuer under subsection 78(18)	An approval of the person as a valuer under section 30‑210
6	An instrument approving an organisation as an approved organisation for the purposes of subsection 78(21)	A declaration that the organisation is an approved organisation for the purposes of section 30‑85
7	An instrument certifying a country to be a developing country for the purposes of subsection 78(21)	A declaration that the country is a developing country for the purposes of section 30‑85

30‑25Keeping in force the old gifts registers

(1)
On and after 1 July 1997, the register described in column 2 of an item in the table in this section (as the register existed at the end of 30 June 1997) also has effect as if it were the register described in column 3 of that item.
Column 2 refers to provisions of the Income Tax Assessment Act 1936. Column 3 refers to provisions of the Income Tax Assessment Act 1997.
(2)
Anything done on or after 1 July 1997 in relation to the register described in column 3 of an item in the table also has effect as if it had been done in relation to the register described in column 2 of that item.

On and after 1 July 1997
Item	This register:	also has effect as if it were:
1	The register of cultural organisations kept under section 78AA	The register of cultural organisations kept under Subdivision 30‑F
2	The register of environmental organisations kept under section 78AB	The register of environmental organisations kept under Subdivision 30‑E

30‑102Fund, authorities and institutions taken to be endorsed

(1)
The authorities and institutions listed in this table are taken to have been endorsed by the Commissioner of Taxation for the purposes of item 12A.1.1 of the table in section 30‑102 of the Income Tax Assessment Act 1997 under paragraph 30‑120(a) of that Act.

Item	Fund, authority or institution	Established under legislation of the following State or Territory
1	State Emergency Service	New South Wales
2	Country Fire Authority	Victoria
3	Victoria State Emergency Service	Victoria
4	Queensland Fire and Rescue Service	Queensland
5	State Emergency Service	Queensland
6	Fire and Emergency Services Authority of Western Australia	Western Australia
7	State Emergency Service South Australia	South Australia
8	Tasmania Fire Service	Tasmania
9	State Emergency Service	Tasmania
10	ACT Rural Fire Service	Australian Capital Territory
11	ACT State Emergency Service	Australian Capital Territory

(2)
The fund listed in this table is taken to have been endorsed by the Commissioner of Taxation for the purposes of item 12A.1.2 of section 30‑102 of the Income Tax Assessment Act 1997 under paragraph 30‑120(b) of that Act.

Item	Fund, authority or institution	Established under legislation of the following State or Territory
1	CFA & Brigades Donations Fund	Victoria

(3)
The funds, authorities and institutions referred to in subsections (1) and (2) are taken to have been endorsed on the day on which Schedule 7 to the Tax Laws Amendment (2010 Measures No. 4) Act 2010 commences.

Division 32Entertainment expenses

Table of sections

32‑1 Application of Division 32 of the Income Tax Assessment Act 1997

32‑1Application of Division 32 of the Income Tax Assessment Act 1997

Division 32 of the Income Tax Assessment Act 1997 applies to assessments for the 1997‑98 income year and later income years.

Division 34Non‑compulsory uniforms

Table of sections

34‑1 Application of Division 34 of the Income Tax Assessment Act 1997
34‑5 Things done under former section 51AL of the Income Tax Assessment Act 1936

34‑1Application of Division 34 of the Income Tax Assessment Act 1997

Division 34 (Non‑compulsory uniforms) of the Income Tax Assessment Act 1997 applies to assessments for the 1997‑98 income year and later income years.

34‑5Things done under former section 51AL of the Income Tax Assessment Act 1936

(1)
From 1 July 1997, anything done under or in connection with a provision of former section 51AL of the Income Tax Assessment Act 1936 has effect as if it had been done under or in connection with the corresponding provision of Division 34 of the Income Tax Assessment Act 1997.
(2)
From 1 July 1997, a thing described in column 2 of an item in the table (as that thing existed at the end of 30 June 1997) has effect as if it were the thing described in column 3 of that item.
Column 2 refers to provisions of the Income Tax Assessment Act 1936. Column 3 refers to provisions of the Income Tax Assessment Act 1997.

As from 1 July 1997
Item	This:	has effect as if it were this:
1	The Register of Approved Occupational Clothing that former subsection 51AL(5) requires the Industry Secretary to keep	The Register of Approved Occupational Clothing that section 34‑45 requires the Industry Secretary to keep
2	Approved occupational clothing guidelines in force under former subsection 51AL(7)	Approved occupational clothing guidelines made under section 34‑55
3	A delegation by the Industry Secretary under former subsection 51AL(23)	A delegation by the Industry Secretary under section 34‑65

(3)
Subsection (2) does not limit the generality of subsection (1).

Division 35Deferral of losses from non‑commercial business activities

Table of sections

35‑10 Deductions for certain new business investment
35‑20 Application of Commissioner’s decisions

35‑10Deductions for certain new business investment

The rule in subsection 35‑10(2) of the Income Tax Assessment Act 1997 does not apply for an income year to a business activity if:
(a)
apart from that rule, you could otherwise deduct amounts under Division 41 of that Act for that income year; and
(b)
the total of those amounts is more than or equal to the excess worked out under that subsection for the business activity for the income year.

35‑20Application of Commissioner’s decisions

A decision of the Commissioner made under section 35‑55 of the Income Tax Assessment Act 1997:
(a)
before the commencement of Schedule 2 to the Tax Laws Amendment (2009 Budget Measures No. 2) Act 2009; and
(b)
for one or more income years;
continues to have effect, after that commencement, for those income years despite the amendments made by that Schedule.

Division 36Tax losses of earlier income years

Table of sections

36‑100 Tax losses for the 1997‑98 and later income years
36‑105 Tax losses for 1989‑90 to 1996‑97 income years
36‑110 Tax losses for 1957‑58 to 1988‑89 income years

36‑100Tax losses for the 1997‑98 and later income years

To work out your tax loss (if any) for the 1997‑98 income year or a later income year, apply the provisions of the Income Tax Assessment Act 1997 about tax losses.
Start at Division 36 of that Act.

36‑105Tax losses for 1989‑90 to 1996‑97 income years

(1)
If you incurred a loss for the purposes of section 79E (General domestic losses of 1989‑90 to 1996‑97 years of income) of the Income Tax Assessment Act 1936 in any of the 1989‑90 to 1996‑97 income years, the loss is your tax loss for that income year, which is called a loss year.
(2)
You can deduct the tax loss in the 1997‑98 or a later income year only to the extent that it has not already been deducted.

36‑110Tax losses for 1957‑58 to 1988‑89 income years

(1)
If you incurred a loss for the purposes of section 80AA (Primary production losses of pre‑1990 years of income) of the Income Tax Assessment Act 1936 in any of the 1957‑58 to 1988‑89 income years, the loss is your tax loss for that income year, which is called a loss year. The loss is also called a primary production loss.
(2)
You can deduct the tax loss in the 1997‑98 or a later income year only to the extent that it has not already been deducted.
(3)
You deduct your primary production losses (in the order in which you incurred them) before any other tax losses of the same or any other loss year, except film losses.
(4)
A company cannot transfer any amount of a primary production loss for the 1983‑84 or an earlier income year under Subdivision 170‑A (Transfer of tax losses within wholly‑owned groups of companies) of the Income Tax Assessment Act 1997.
(5)
For the purposes of determining how much (if any) of a primary production loss you can deduct in the 1997‑98 or a later income year, subsections 80AA(9), (10) and (11) of the Income Tax Assessment Act 1936 apply in the same way as they apply for the purposes they refer to.

Part 2‑10Capital allowances: rules about deductibility of capital expenditureDivision 40Capital allowances

Table of Subdivisions

40‑B Core provisions
40‑BA Backing business investment
40‑BB Temporary full expensing of depreciating assets
40‑C Cost
40‑D Balancing adjustments
40‑E Low‑value and software development pools
40‑F Primary production depreciating assets
40‑G Capital expenditure of primary producers and other landholders
40‑I Capital expenditure that is deductible over time
40‑J Ships depreciated under section 57AM of the Income Tax Assessment Act 1936

Subdivision 40‑BCore provisions

Table of sections

40‑10 Plant
40‑12 Plant acquired after 30 June 2001
40‑13 Accelerated depreciation for split or merged plant
40‑15 Recalculating effective life
40‑20 IRUs
40‑25 Software
40‑30 Spectrum licences
40‑33 Datacasting transmitter licences
40‑35 Mining unrecouped expenditure

40‑37 Post‑30 June 2001 mining expenditure
40‑38 Mining cash bidding payments
40‑40 Transport expenditure
40‑43 Post‑30 June 2001 transport expenditure
40‑44 No additional decline in certain cases
40‑45 Intellectual property
40‑47 IRUs
40‑50 Forestry roads and timber mill buildings
40‑55 Environmental impact assessment
40‑60 Pooling under Subdivision 42‑L of the former Act
40‑65 Substituted accounting periods
40‑67 Methods for working out decline in value
40‑70 References to amounts deducted and reductions in deductions
40‑72 New diminishing value method not to apply in some cases
40‑75 Mining expenditure incurred after 1 July 2001 on an asset
40‑77 Mining, quarrying or prospecting rights or information held before 1 July 2001
40‑80 Other expenditure incurred after 1 July 2001 on a depreciating asset
40‑100 Commissioner’s determination of effective life
40‑105 Calculations of effective life

40‑10Plant

(1)
This section applies to you if:
(a)
you have deducted or can deduct amounts for plant under Division 42 of the Income Tax Assessment Act 1997 (the former Act) as in force just before it was amended by the New Business Tax System (Capital Allowances) Act 2001 and the New Business Tax System (Capital Allowances—Transitional and Consequential) Act 2001, or you could have deducted amounts under that Division for the plant if you had used it, or had it installed ready for use, for the purpose of producing assessable income before that day; and
(b)
either:
(i)
you hold the plant at 1 July 2001; or
(ii)
subparagraph (i) does not apply and you were the owner or quasi‑owner of the plant at the end of 30 June 2001.
(2)
Division 40 of the Income Tax Assessment Act 1997 as amended by the New Business Tax System (Capital Allowances) Act 2001 and the New Business Tax System (Capital Allowances—Transitional and Consequential) Act 2001 (the new Act) applies to the plant on this basis:
(a)
the amount that was your undeducted cost at the end of 30 June 2001 becomes the plant’s opening adjustable value; and
(b)
you use the same cost, effective life and method that you were using under Division 42 of the former Act, or that you would have used if you had used the plant for the purpose of producing assessable income at the end of 30 June 2001; and
(c)
if you excluded an amount from your assessable income under section 42‑290 of the former Act for a balancing adjustment event that occurred on or before 11.45 am, by legal time in the Australian Capital Territory, on 21 September 1999—the cost of the plant, and its opening adjustable value, are reduced by that amount; and
(d)
if subparagraph (1)(b)(ii) applies to you—you are treated as the holder of the plant while you are its holder or while the circumstances under which you would have been the owner or quasi‑owner of the plant under the former Act continue.
Note: There are special rules for entities that have substituted accounting periods: see section 40‑65.
(3)
If you were using a rate for the plant under subsection 42‑160(1) or 42‑165(1) of the former Act just before 1 July 2001, or would have been using such a rate if you had used it, or had it installed ready for use, for the purpose of producing assessable income before that day, Division 40 of the new Act applies to the plant on this basis:
(a)
for the diminishing value method—replace the component in the formula in subsection 40‑70(1) of the new Act that includes the plant’s effective life with the rate you were using; and
(b)
for the prime cost method:
(i)
replace the component in the formula in subsection 40‑75(1) of the new Act that includes the plant’s effective life with the rate you were using; and
(ii)
increase the plant’s cost under Division 42 of the former Act by any amounts included in the second element of the plant’s cost after 30 June 2001.
Note 1: Recalculating effective life will have no practical effect for an entity to whom subsection (3) applies because the component in the relevant formula that relies on effective life has been replaced.
Note 2: Small business entities can choose to work out the decline in value of their depreciating assets under Division 328.

40‑12Plant acquired after 30 June 2001

(1)
This section applies to you if:
(a)
you entered into a contract to acquire an item of plant before 1 July 2001 and you acquired it after 30 June 2001; or
(b)
you started to construct an item of plant before 1 July 2001 and you complete its construction after 30 June 2001.
(2)
Division 40 of the new Act applies to the plant.
(3)
If you entered into the contract, or started to construct the plant, at or before 11.45 am, by legal time in the Australian Capital Territory, on 21 September 1999, you replace the component in the formula in subsection 40‑70(1) or 40‑75(1) of the new Act that includes the plant’s effective life with the rate you would have been using if you had acquired it, or completed its construction, before 1 July 2001 and had used it, or had it installed ready for use, for the purpose of producing assessable income before that day.

40‑13Accelerated depreciation for split or merged plant

(1)
This section applies to a depreciating asset that is plant if:
(a)
you entered into a contract to acquire the plant, you otherwise acquired it or you started to construct it before 11.45 am, by legal time in the Australian Capital Territory, on 21 September 1999; and
(b)
you held it at the end of 30 June 2001; and
(c)
on or after 1 July 2001:
(i)
the plant is split into 2 or more depreciating assets; or
(ii)
the plant is merged into another depreciating asset.
(2)
For a case where the plant is split into 2 or more depreciating assets, the new Act applies as if you had acquired the assets into which it is split before the time mentioned in paragraph (1)(a) while you continue to hold those assets.
(3)
For a case where the plant is merged into another depreciating asset, section 40‑125 of the new Act does not apply to the asset, or to your interest in the asset, into which it is merged while you continue to hold it.

40‑15Recalculating effective life

You cannot recalculate the effective life of a depreciating asset for which:
(a)
you were using, just before 1 July 2001, a rate under subsection 42‑160(1) or 42‑165(1) of the former Act; or
(b)
you would have been using such a rate if you had used the asset, or had it installed ready for use, for the purpose of producing assessable income before that day.

40‑20IRUs

(1)
This section applies to you if:
(a)
you have deducted or can deduct an amount for an IRU under Division 44 of the former Act or you would have been able to deduct an amount for it under that Division if you had used it for the purpose of producing assessable income before 1 July 2001; and
(b)
you hold the IRU at 1 July 2001.
(2)
Division 40 of the new Act applies to the IRU on this basis:
(a)
you use the cost, effective life and method you were using under Division 44 of the former Act or that you would have used if you had used the IRU for the purpose of producing assessable income before 1 July 2001; and

(b)
the amount that was your undeducted cost of the IRU at the end of 30 June 2001 becomes the IRU’s opening adjustable value.
Note: There are special rules for entities that have substituted accounting periods: see section 40‑65.

40‑25Software

(1)
Despite its repeal by this Act, Division 46 of the former Act continues to apply to expenditure on software that you incurred and that was in a software pool under that Division at the end of 30 June 2001.
(2)
For a unit of software for which you were deducting amounts under Subdivision 46‑B of the former Act or for which you could have deducted amounts under that Subdivision if you had used the software for the purpose of producing assessable income before 1 July 2001, Division 40 of the new Act applies to the unit on this basis:
(a)
its cost is the amount of expenditure you incurred on the unit; and
(b)
you must use the prime cost method; and
(c)
its opening adjustable value at 1 July 2001 is its undeducted cost at the end of 30 June 2001; and
(d)
you must use the same effective life you were using under Subdivision 46‑B of the former Act or that you would have used if you had used the software for the purpose of producing assessable income before 1 July 2001.
Note: There are special rules for entities that have substituted accounting periods: see section 40‑65.

40‑30Spectrum licences

(1)
This section applies to you if you have deducted or can deduct an amount under Division 380 of the former Act for expenditure incurred in obtaining a spectrum licence on or before 30 June 2001 or you could have deducted an amount under that Division for that expenditure if you had used the licence for the purpose of producing assessable income on or before that day.
(2)
Division 40 of the new Act applies to the spectrum licence on this basis:
(a)
its cost is your expenditure incurred in obtaining the licence; and
(b)
its opening adjustable value at 1 July 2001 is the amount of unrecouped expenditure for the licence at the end of 30 June 2001; and
(c)
its effective life is the same as it had under the former Act; and
(d)
you must use the prime cost method.
Note: There are special rules for entities that have substituted accounting periods: see section 40‑65.

40‑33Datacasting transmitter licences

(1)
This section applies to you if you hold a datacasting transmitter licence at 1 July 2001.
(2)
Division 40 of the new Act applies to the licence on this basis:
(a)
its cost is your expenditure incurred in obtaining the licence; and
(b)
its opening adjustable value at 1 July 2001 is its cost; and
(c)
its effective life is 15 years less any period that has elapsed from the day the licence was issued until 1 July 2001; and
(d)
you must use the prime cost method.

40‑35Mining unrecouped expenditure

(1)
This section applies to you if you have an amount of unrecouped expenditure under Division 330 of the former Act at the end of 30 June 2001.
Note: Subsection (6) also applies to a case where you did not have unrecouped expenditure at 30 June 2001: see subsection (8).
(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 amount of unrecouped expenditure reduced by any deductions allowable under section 330‑80 of the former Act for your income year ending on 30 June 2001; and
(b)
it has a cost equal to the total amount of allowable capital expenditure under the former Act; and
(c)
in applying the formula in section 40‑75 of the new Act for the income year in which 1 July 2001 occurs—you use the adjustments in subsection 40‑75(3) of the new Act; and
(d)
it is taken to have been used for a taxable purpose at the start of 1 July 2001; and
(e)
it has a remaining effective life worked out under subsection (3); and
(f)
you must use the prime cost method.
Note: There are special rules for entities that have substituted accounting periods: see section 40‑65.
(3)
The remaining effective life of the notional asset at the start of an income year (present income year) for which you are working out its decline in value is:
(a)
for an amount of unrecouped expenditure in respect of expenditure incurred in carrying on eligible mining operations other than in the course of petroleum mining is the lesser of these:
(i)
the number equal to the difference between 10 and the number of income years (which may be zero) before the present income year for which an amount in respect of expenditure was deductible;
(ii)
the number equal to the number of whole years in the estimated life of the mine, or proposed mine, on the mining property, or, if there is more than one such mine, of the mine that has the longest estimated life, as at the end of the present income year; or
(b)
for an amount of unrecouped expenditure in respect of expenditure incurred in carrying on eligible mining operations in the course of petroleum mining is the lesser of these:
(i)
the number equal to the difference between 10 and the number of income years (which may be zero) before the present income year for which an amount in respect of expenditure was deductible;
(ii)
the number equal to the number of whole years in the estimated life of the petroleum field or proposed petroleum field as at the end of the present income year; or
(c)
for an amount of unrecouped expenditure in respect of expenditure incurred in carrying on eligible quarrying operations the lesser of these:
(i)
the number equal to the difference between 20 and the number of income years (which may be zero) before the present income year for which an amount in respect of expenditure was deductible; and
(ii)
the number equal to the number of whole years in the estimated life of the quarry, or proposed quarry, on the quarrying property, or, if there is more than one such quarry, of the quarry that has the longest estimated life, as at the end of the present income year.
(4)
Sections 40‑95 and 40‑110 of the new Act do not apply to the unrecouped expenditure.
(5)
If either:
(a)
both of these subparagraphs apply:
(i)
any of the unrecouped 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 unrecouped 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 much of the notional asset’s adjustable value as relates to the real asset or the other property and has not been taken into account in working out the amount of a balancing adjustment in relation to the real asset.
(6)
If the other property is disposed of, lost or destroyed, or you stop using it for a taxable purpose, you must include in your assessable income:
(a)
if the other property is sold for a price specific to that property—that price, less the expenses of the sale (to the extent the expenses are reasonably attributable to selling that particular property); or
(b)
if the other property is sold with additional property without a specific price being allocated to it—the part of the total sale price, less the reasonably attributable expenses of the sale, that is reasonably attributable to selling the other property; or
(c)
if the other property is lost or destroyed—the amount or value received or receivable under an insurance policy or otherwise for the loss or destruction; or
(d)
if you own the other property and you stop using it for a taxable purpose—its market value at that time; or
(e)
if you do not own the property and you stop using it for a taxable purpose—a reasonable amount.
However, the amount included is reduced to the extent (if any) that it is also included under subsection 40‑830(6) of the new Act.
(7)
If section 40‑115 of the new Act applies, or section 40‑125 of the new Act would, apart from this subsection, apply, to the real asset referred to in subsection (5) of this section, then:
(a)
if the real asset is split into 2 or more depreciating assets and you stop holding, or stop using for a taxable purpose, one or more but not all of the assets into which it is split—subsection (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.
(8)
Subsection (6) also applies to a case where:
(a)
you did not have an amount of unrecouped expenditure under Division 330 of the former Act at the end of 30 June 2001, but you had an amount of unrecouped expenditure under that Division before 30 June 2001; and
(b)
that expenditure relates to property that is not a depreciating asset (the other property); and
(c)
after that day, the other property is disposed of, lost or destroyed, or you stop using it for a taxable purpose.

40‑37Post‑30 June 2001 mining expenditure

(1)
This section applies to you if:
(a)
you incur expenditure after 30 June 2001 under a contract entered into before that day; and
(b)
the expenditure would have been allowable capital expenditure, and you could have deducted an amount for it, under Division 330 of the former Act if you had incurred it before 1 July 2001; and
(c)
the expenditure does not relate to a depreciating asset.
(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 a cost at the time you incur the expenditure equal to the amount of the expenditure; and
(b)
in applying the formula in section 40‑75 of the new Act for the income year in which you incur the expenditure—you use the adjustments in subsection 40‑75(3) of the new Act; and
(c)
it is taken to be used for a taxable purpose when you incur the expenditure; and
(d)
it has an effective life worked out under subsection (3); 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)
The effective life of the notional asset at the start of an income year (present income year) for which you are working out its decline in value is:
(a)
for an amount of expenditure incurred in carrying on eligible mining operations other than in the course of petroleum mining—the lesser of 10 and the number equal to the number of whole years in the estimated life of the mine, or proposed mine, on the mining property, or, if there is more than one such mine, of the mine that has the longest estimated life, as at the end of the present income year; or
(b)
for an amount of expenditure incurred in carrying on eligible mining operations in the course of petroleum mining—the lesser of 10 and the number equal to the number of whole years in the estimated life of the petroleum field or proposed petroleum field as at the end of the present income year; or
(c)
for an amount of expenditure incurred in carrying on eligible quarrying operations—the lesser of 20 and the number equal to the number of whole years in the estimated life of the quarry, or proposed quarry, on the quarrying property, or, if there is more than one such quarry, of the quarry that has the longest estimated life, as at the end of the present income year.
(4)
Sections 40‑95 and 40‑110 of the new Act do not apply to the expenditure.
(5)
If both of these paragraphs apply:
(a)
any of the expenditure referred to in subsection (1) relates to property that is not a depreciating asset (the other property);
(b)
in an income year (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 much of the notional asset’s adjustable value as relates to the other property.
(6)
If the other property is disposed of, lost or destroyed, or you stop using it for a taxable purpose, you must include in your assessable income:
(a)
if the other property is sold for a price specific to that property—that price, less the expenses of the sale (to the extent the expenses are reasonably attributable to selling that particular property); or
(b)
if the other property is sold with additional property without a specific price being allocated to it—the part of the total sale price, less the reasonably attributable expenses of the sale, that is reasonably attributable to selling the other property; or
(c)
if the other property is lost or destroyed—the amount or value received or receivable under an insurance policy or otherwise for the loss or destruction; or
(d)
if you own the other property and you stop using it for a taxable purpose—its market value at that time; or
(e)
if you do not own the property and you stop using it for a taxable purpose—a reasonable amount.
However, the amount included is reduced to the extent (if any) that it is also included under subsection 40‑830(6) of the new Act.

40‑38Mining cash bidding payments

(1)
This section applies to expenditure you incur, under a contract entered into before 30 June 2001, if:
(a)
the expenditure would have been a mining cash bidding payment under Subdivision 330‑D of the former Act; and
(b)
either:
(i)
you incurred the expenditure before that day but the grant of the mining authority concerned occurred on a day (the start day) after 30 June 2001; or
(ii)
the grant of the mining authority concerned occurred before 30 June 2001 but you incurred the expenditure on a day (also the start day) after 30 June 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 a cost at the start day equal to the amount of the expenditure; and
(b)
in applying the formula in section 40‑75 of the new Act for the income year in which the start day occurs—you use the adjustments in subsection 40‑75(3) of the new Act; and
(c)
it is taken to be used for a taxable purpose on the start day; and
(d)
it has an effective life worked out under subsection (3); 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)
The effective life of the notional asset at the start of an income year (present income year) for which you are working out its decline in value is:
(a)
for an amount of expenditure incurred in carrying on eligible mining operations other than in the course of petroleum mining—the lesser of 10 and the number equal to the number of whole years in the estimated life of the mine, or proposed mine, on the mining property, or, if there is more than one such mine, of the mine that has the longest estimated life, as at the end of the present income year; or
(b)
for an amount of expenditure incurred in carrying on eligible mining operations in the course of petroleum mining—the lesser of 10 and the number equal to the number of whole years in the estimated life of the petroleum field or proposed petroleum field as at the end of the present income year.
(4)
Sections 40‑95 and 40‑110 of the new Act do not apply to the expenditure.
(5)
If both of these paragraphs apply:
(a)
any of the expenditure referred to in subsection (1) relates to a depreciating asset (the real asset);
(b)
in an income year (the cessation year) you stop holding the real asset, or 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 much of the notional asset’s adjustable value as relates to the real asset and has not been taken into account in working out the amount of a balancing adjustment in relation to the real asset.
(6)
If section 40‑115 of the new Act applies, or section 40‑125 of the new Act would, apart from this subsection, apply, to the real asset referred to in subsection (5) of this section, then:
(a)
if the real asset is split into 2 or more depreciating assets and you stop holding, or stop using for a taxable purpose, one or more but not all of the assets into which it is split—subsection (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.

40‑40Transport 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 much of the notional asset’s adjustable value as relates to the real asset or the other property and has not been taken into account in working out the amount of a balancing adjustment in relation to the real asset.
(5)
If the other property is disposed of, lost or destroyed, or you stop using it for a taxable purpose, you must include in your assessable income:
(a)
if the other property is sold for a price specific to that property—that price, less the expenses of the sale (to the extent the expenses are reasonably attributable to selling that particular property); or
(b)
if the other property is sold with additional property without a specific price being allocated to it—the part of the total sale price, less the reasonably attributable expenses of the sale, that is reasonably attributable to selling the other property; or
(c)
if the other property is lost or destroyed—the amount or value received or receivable under an insurance policy or otherwise for the loss or destruction; or
(d)
if you own the other property and you stop using it for a taxable purpose—its market value at that time; or
(e)
if you do not own the property and you stop using it for a taxable purpose—a reasonable amount.
However, the amount included is reduced to the extent (if any) that it is also included under subsection 40‑830(6) of the new Act.

ad. No. 117, 2002
s. 701A‑5...................................	ad. No. 117, 2002
s. 701A‑7...................................	ad. No. 132, 2011
s. 701A‑10..................................	ad. No. 117, 2002
Division 701B
Division 701B heading................	rs. No. 16, 2003
Division 701B.............................	ad. No. 117, 2002
s. 701B‑1....................................	ad. No. 117, 2002
am. No. 107, 2003
Division 701C
Division 701C.............................	ad. No. 16, 2003
Subdivision 701C‑A
s. 701C‑1....................................	ad. No. 16, 2003
Note to s. 701C‑1........................	ad. No. 67, 2003
Link note to s. 701C‑1.................	rep. No. 41, 2005
Subdivision 701C‑B
Heading to s. 701C‑10.................	rs. No. 143, 2007
s. 701C‑10..................................	ad. No. 16, 2003
Note to s. 701C‑10(1)..................	ad. No. 67, 2003
Heading to s. 701C‑15.................	rs. No. 143, 2007
s. 701C‑15..................................	ad. No. 16, 2003
Note to s. 701C‑15(1)..................	ad. No. 67, 2003
s. 701C‑20..................................	ad. No. 16, 2003
Subdivision 701C‑C
s. 701C‑25..................................	ad. No. 16, 2003
s. 701C‑30..................................	ad. No. 16, 2003
am. No. 67, 2003
Note 2 to s. 701C‑30....................	am. No. 67, 2003
s. 701C‑35..................................	ad. No. 16, 2003
am. No. 67, 2003
s. 701C‑40..................................	ad. No. 16, 2003
s. 701C‑50..................................	ad. No. 16, 2003
Division 701D
Division 701D............................	ad. No. 101, 2004
Subdivision 701D‑A
s. 701D‑1...................................	ad. No. 101, 2004
am. No. 143, 2007
Link note to s. 701D‑1.................	rep. No. 41, 2005
Subdivision 701D‑B
s. 701D‑10..................................	ad. No. 101, 2004
am. No. 83, 2004; No. 64, 2005; No. 143, 2007
s. 701D‑15..................................	ad. No. 101, 2004
am. No. 56, 2010
Division 702
Division 702...............................	ad. No. 90, 2002
s. 702‑1......................................	ad. No. 90, 2002
s. 702‑4......................................	ad. No. 83, 2004
s. 702‑5......................................	ad. No. 90, 2002
Division 703
s. 703‑30....................................	ad. No. 68, 2002
Link note to s. 703‑30..................	rep. No. 23, 2005
s. 703‑35....................................	ad. No. 133, 2009
Division 705
Division 705...............................	ad. No. 23, 2005
Subdivision 705‑E
s. 705‑300..................................	ad. No. 23, 2005
s. 705‑305..................................	ad. No. 23, 2005
Note to s. 705‑305(9)...................	am. No. 56, 2010
s. 705‑310..................................	ad. No. 23, 2005
Division 707
Division 707 heading...................	rs. No. 20, 2004
Subdivision 707‑A
Subdivision 707‑A heading..........	rs No 88, 2013
Subdivision 707‑A......................	ad. No. 20, 2004
s. 707‑145..................................	ad. No. 20, 2004
am. No. 162, 2005
Subdivision 707‑C
s. 707‑325..................................	ad. No. 68, 2002
am. No. 90, 2002; Nos. 20 and 101, 2004; Nos. 41 and 162, 2005; No. 143, 2007
s. 707‑326..................................	ad. No. 16, 2003
am. No. 143, 2007
s. 707‑327..................................	ad. No. 68, 2002
am. No. 90, 2002; No. 20, 2004; No. 162, 2005
Note to s. 707‑327(1)...................	ad. No. 90, 2002
Note to s. 707‑327(5)...................	ad. No. 41, 2005
Note to s. 707‑327(6)...................	am. No. 90, 2002
s. 707‑328..................................	ad. No. 68, 2002
s. 707‑328A................................	ad. No. 16, 2003
am. No. 20, 2004; No. 162, 2005; No. 143, 2007
Note to s. 707‑328A(4)................	ad. No. 41, 2005
s. 707‑329..................................	ad. No. 68, 2002
Link note to s. 707‑329................	rep. No. 41, 2005
s 707‑350...................................	ad No 68, 2002
am No 20, 2004; No 101, 2004; No 41, 2005; No 162, 2005
s. 707‑355..................................	ad. No. 41, 2005
Subdivision 707‑D
s. 707‑405..................................	ad. No. 68, 2002
Link note to s. 707‑405................	rs. No. 90, 2002
rep. No. 23, 2005
Division 709
Division 709...............................	ad. No. 41, 2005
Subdivision 709‑D
s. 709‑200..................................	ad. No. 41, 2005
Division 712
Division 712...............................	ad. No. 23, 2005
Subdivision 712‑E
s. 712‑305..................................	ad. No. 23, 2005
Division 713
Division 713...............................	ad. No. 16, 2003
Subdivision 713‑L
s. 713‑500..................................	ad. No. 16, 2003
s. 713‑505..................................	ad. No. 16, 2003
s. 713‑510..................................	ad. No. 16, 2003
s. 713‑515..................................	ad. No. 16, 2003
s. 713‑520..................................	ad. No. 16, 2003
s. 713‑525..................................	ad. No. 16, 2003
s. 713‑530..................................	ad. No. 16, 2003
s. 713‑535..................................	ad. No. 16, 2003
s. 713‑540..................................	ad. No. 16, 2003
s. 713‑545..................................	ad. No. 16, 2003
Subdivision 713‑M
Subdivision 713‑M......................	ad. No. 41, 2005
s. 713‑700..................................	ad. No. 41, 2005
Division 715
Division 715...............................	ad. No. 23, 2005
Subdivision 715‑F
Subdivision 715‑F.......................	ad. No. 15, 2009
s. 715‑380..................................	ad. No. 15, 2009
Subdivision 715‑J
s. 715‑658..................................	ad. No. 23, 2005
s. 715‑659..................................	ad. No. 23, 2005
Subdivision 715‑K
s. 715‑698..................................	ad. No. 23, 2005
s. 715‑699..................................	ad. No. 23, 2005
Division 716
Division 716...............................	ad. No. 23, 2005
Subdivision 716‑G
s. 716‑340..................................	ad. No. 23, 2005
Division 717...............................	ad. No. 90, 2002
rep. No. 143, 2007
s. 717‑15....................................	ad. No. 90, 2002
rep. No. 143, 2007
s. 717‑20....................................	ad. No. 90, 2002
rep. No. 143, 2007
s. 717‑25....................................	ad. No. 90, 2002
rep. No. 143, 2007
Link note to s. 717‑25..................	rs. No. 117, 2002
rep. No. 41, 2005
s. 717‑30....................................	ad. No. 117, 2002
rep. No. 143, 2007
Division 719
Division 719...............................	ad. No. 117, 2002
Subdivision 719‑A
Subdivision 719‑A......................	ad. No. 16, 2003
s. 719‑2......................................	ad. No. 16, 2003
am. Nos. 67 and 107, 2003
Subdivision 719‑B
Subdivision 719‑B.......................	ad. No. 16, 2003
s. 719‑5......................................	ad. No. 16, 2003
s. 719‑10....................................	ad. No. 67, 2003
s. 719‑15....................................	ad. No. 101, 2004
s. 719‑30....................................	ad. No. 133, 2009
Subdivision 719‑C
s. 719‑160..................................	ad. No. 117, 2002
am. No. 107, 2003
s. 719‑161..................................	ad. No. 83, 2004
s. 719‑163..................................	ad. No. 16, 2003
s. 719‑165..................................	ad. No. 117, 2002
Subdivision 719‑F
s. 719‑305..................................	ad. No. 117, 2002
Link note to s. 719‑305................	rep. No. 41, 2005
s. 719‑310..................................	ad. No. 20, 2004
am. No. 162, 2005
Subdivision 719‑I
Subdivision 719‑I........................	ad. No. 162, 2005
s. 719‑450..................................	ad. No. 162, 2005
Division 721
Division 721...............................	ad. No. 79, 2010
Subdivision 721‑A
s. 721‑25....................................	ad. No. 79, 2010
Part 3‑95
Part 3‑95....................................	ad. No. 90, 2002
Division 723
s. 723‑1......................................	ad. No. 90, 2002
am. No. 16, 2003
Division 725
s. 725‑1......................................	ad. No. 90, 2002
Division 727
s. 727‑1......................................	ad. No. 90, 2002
am. No. 16, 2003
s. 727‑230..................................	ad. No. 20, 2004
s. 727‑470..................................	ad. No. 80, 2007
Chapter 4
Chapt. 4.....................................	ad. No. 162, 2001
Part 4‑5
Link note to Part 4‑5....................	rep. No. 41, 2005
Division 770...............................	ad. No. 143, 2007
rep No 143, 2007
s. 770‑1......................................	ad. No. 143, 2007
am. No. 88, 2009
rep No 143, 2007
s. 770‑5......................................	ad. No. 143, 2007
am. No. 88, 2009
rep No 143, 2007
s. 770‑10....................................	ad. No. 143, 2007
am. No. 88, 2009
rep No 143, 2007
s. 770‑15....................................	ad. No. 143, 2007
rep No 143, 2007
s. 770‑20....................................	ad. No. 143, 2007
rep No 143, 2007
s. 770‑25....................................	ad. No. 143, 2007
rep No 143, 2007
s. 770‑30....................................	ad. No. 143, 2007
am. No. 88, 2009
rep No 143, 2007
Note to s 770‑30(2).....................	am No 88, 2013
rep No 143, 2007
s. 770‑35....................................	ad. No. 143, 2007
rep No 143, 2007
s. 770‑80....................................	ad. No. 143, 2007
rep No 143, 2007
s. 770‑85....................................	ad. No. 143, 2007
rep No 143, 2007
s. 770‑90....................................	ad. No. 143, 2007
rep No 143, 2007
s. 770‑95....................................	ad. No. 143, 2007
am. No. 88, 2009
rep No 143, 2007
Note to s. 770‑95.........................	ad. No. 88, 2009
rep No 143, 2007
Notes 1, 2 to s. 770‑95.................	rep. No. 88, 2009
s. 770‑100..................................	ad. No. 143, 2007
am. No. 88, 2009
rep No 143, 2007
s. 770‑105..................................	ad. No. 143, 2007
rep No 143, 2007
s. 770‑110..................................	ad. No. 143, 2007
rep No 143, 2007
s. 770‑160..................................	ad. No. 143, 2007
rep No 143, 2007
s. 770‑165..................................	ad. No. 143, 2007
am. No. 88, 2009
rep No 143, 2007
Heading to s. 770‑170..................	rs. No. 88, 2009
rep No 143, 2007
s. 770‑170..................................	ad. No. 143, 2007
am. No. 88, 2009
rep No 143, 2007
s. 770‑220..................................	ad. No. 143, 2007
rep No 143, 2007
s. 770‑225..................................	ad. No. 143, 2007
rep No 143, 2007
s. 770‑230..................................	ad. No. 143, 2007
am. No. 56, 2010
rep No 143, 2007
s. 770‑285..................................	ad. No. 143, 2007
rep No 143, 2007
s. 770‑290..................................	ad. No. 143, 2007
rep No 143, 2007
s. 770‑295..................................	ad. No. 143, 2007
rep No 143, 2007
s. 770‑300..................................	ad. No. 143, 2007
rep No 143, 2007
s. 770‑305..................................	ad. No. 143, 2007
rep No 143, 2007
s. 770‑310..................................	ad. No. 143, 2007
rep No 143, 2007
Division 815
Division 815...............................	ad. No. 115, 2012
Subdivision 815‑A
Subdivision 815‑ A heading..........	rs No 101, 2013
s. 815‑1......................................	ad. No. 115, 2012
am No 101,2013
s. 815‑5......................................	ad. No. 115, 2012
s. 815‑10....................................	ad. No. 115, 2012
s 815‑15.....................................	ad No 101, 2013
Division 820
s. 820‑10....................................	ad. No. 162, 2001
am. No. 117, 2002
s. 820‑12....................................	ad. No. 162, 2001
s. 820‑15....................................	ad. No. 162, 2001
rep. No. 101, 2006
s. 820‑20....................................	ad. No. 162, 2001
rep. No. 101, 2006
s. 820‑25....................................	ad. No. 162, 2001
rep. No. 101, 2006
s. 820‑30....................................	ad. No. 162, 2001
rep. No. 101, 2006
s. 820‑35....................................	ad. No. 162, 2001
rep. No. 101, 2006
s. 820‑40....................................	ad. No. 162, 2001
am. No. 53, 2002
rep. No. 101, 2006
s. 820‑45....................................	ad. No. 162, 2005
am. No. 79, 2007
Division 830
Division 830...............................	ad. No. 101, 2004
s. 830‑1......................................	ad. No. 101, 2004
s. 830‑5......................................	ad. No. 101, 2004
rep. No. 101, 2006
s. 830‑10....................................	ad. No. 101, 2004
rep. No. 101, 2006
s. 830‑15....................................	ad. No. 101, 2004
am. No. 161, 2005
s. 830‑20....................................	ad. No. 101, 2004
am. No. 143, 2007
Division 832
Division 832...............................	ad No 84, 2018
Subdivision 832‑A
s 832‑10.....................................	ad No 84, 2018
s 832‑15.....................................	ad No 84, 2018
Division 840
Division 840...............................	ad. No. 32, 2008
Subdivision 840‑M
s. 840‑805..................................	ad. No. 32, 2008
s. 840‑810..................................	ad. No. 32, 2008
Subdivision 840‑S
Subdivision 840‑S heading..........	rs No 75, 2022
Subdivision 840‑S.......................	ad No 58, 2012
s 840‑905...................................	ad No 58, 2012
Division 842
Division 842...............................	ad. No. 126, 2012
Subdivision 842‑I
s 842‑207...................................	ad No 70, 2015
s 842‑208...................................	ad No 70, 2015
s 842‑209...................................	ad No 70, 2015
s. 842‑210..................................	ad. No. 126, 2012
s. 842‑215..................................	ad. No. 126, 2012
s. 842‑220..................................	ad. No. 126, 2012
s. 842‑225..................................	ad. No. 126, 2012
s. 842‑230..................................	ad. No. 126, 2012
s. 842‑235..................................	ad. No. 126, 2012
s. 842‑240..................................	ad. No. 126, 2012
s. 842‑245..................................	ad. No. 126, 2012
Division 880
Division 880...............................	ad No 34, 2019
s 880‑1.......................................	ad No 34, 2019
s 880‑5.......................................	ad No 34, 2019
s 880‑10.....................................	ad No 34, 2019
s 880‑15.....................................	ad No 34, 2019
s 880‑20.....................................	ad No 34, 2019
s 880‑25.....................................	ad No 34, 2019
Chapter 5
Chapt. 5.....................................	ad. No. 164, 2007
Part 5‑35
Division 909
s. 909‑1......................................	ad. No. 164, 2007
Chapter 6
Chapt. 6.....................................	ad. No. 46, 1998
Part 6‑1
Link note to Part 6‑1....................	rep. No. 41, 2005
Division 960
Subdivision 960‑B
Subdivision 960‑B.......................	ad No 96, 2014
s 960‑20.....................................	ad No 96, 2014
Subdivision 960‑E
Subdivision 960‑E.......................	ad. No. 117, 1999
s. 960‑100..................................	ad. No. 117, 1999
s. 960‑105..................................	ad. No. 117, 1999
am. No. 66, 2000
s. 960‑110..................................	ad. No. 117, 1999
am. No. 66, 2000
s. 960‑115..................................	ad. No. 58, 2006
Subdivision 960‑M
Subdivision 960‑M......................	ad. No. 46, 1998
s. 960‑262..................................	ad. No. 46, 1998
s. 960‑275..................................	ad. No. 46, 1998