Income Tax (Transitional Provisions) Act 1997

This section applies to you if:

you have deducted or can deduct an amount under Subdivision 387‑G of the former Act for an amount (the qualifying amount) of expenditure on a forestry road or timber mill building or could have deducted an amount under that Subdivision if you had used the road or building for the purpose of producing assessable income; and

you hold the road or building at the end of 30 June 2001.

Division 40 of the new Act applies to the asset on this basis:

it has an opening adjustable value at 1 July 2001 equal to the qualifying amount less any amounts you have deducted or can deduct for it under the former Act; and

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

its cost is the qualifying amount; and

it has an effective life equal to the remaining life you last estimated for it under the former Act; and

you can recalculate its effective life if you conclude that your estimate is no longer accurate (except that the effective life cannot exceed 25 years); and

you must use the prime cost method.

There are special rules for entities that have substituted accounting periods: see section 40‑65.