Income Tax (Transitional Provisions) Act 1997

This section applies if:

on or after 1 July 2001, a company (the transferor) disposes of a depreciating asset to another company; and

the companies are members of the same linked group at the time of the disposal; and

apart from this section, the disposal would have resulted in:

an amount (the included amount) being included in the assessable income of the transferor under subsection 40‑285(1) of the Income Tax Assessment Act 1997; and

the transferor having an additional decline in value (the deductible amount) under subsection 40‑35(5), 40‑38(5) or 40‑40(4) of this Act; and

the included amount is more than the deductible amount.

Subsection 40‑35(5), 40‑38(5) or 40‑40(4) of this Act does not apply to the disposal.

The amount that is included in the transferor’s assessable income under subsection 40‑285(1) of the Income Tax Assessment Act 1997 is the included amount reduced by the deductible amount.