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Schedule 3 — Small business entities’ deductions for motor vehicles
Income Tax Assessment Act 1997
1 After subsection 328-190(2)
Insert:
(2A) Subsection (2) does not apply to a * depreciating asset that is a * motor vehicle if section 328-237 applies to the asset for the income year.
2 Section 328-200 (method statement, step 2, paragraph (c))
After “328-190(2)”, insert “, and subsection 328-237(2) (if relevant),”.
3 After section 328-235
Insert:
Special rules for certain motor vehicles
328-237 Special deduction for certain motor vehicles
(1) This section applies to a * depreciating asset that is a * motor vehicle if:
(a) in an income year (the start year ) you start to use the asset, or have it * installed ready for use, for a * taxable purpose; and
(b) you were a * small business entity for the start year and the income year in which you started to * hold the asset; and
(c) you chose to use this Subdivision for each of those years; and
(d) subsection 328-180(1) does not provide for your deduction for the depreciating asset for the start year.
Deduction for the start year
(2) You deduct for the * depreciating asset for the start year the amount worked out under whichever of subsections (3) and (4) applies.
(3) The amount of your deduction is the * taxable purpose proportion of the * adjustable value of the * depreciating asset at the end of the start year if that proportion of that value is $5,000 or less.
(4) If that proportion of that value is more than $5,000, the amount of your deduction is the sum of:
(a) $5,000; and
(b) 15% of the amount worked out using the formula:
Special deduction denied if low pool value
(5) Subsection (2) does not apply if section 328-210 sets your deduction for a * general small business pool for the start year.
Special rules about roll-overs
4 Subsection 328-250(1)
Omit “or subsection 328-190(2) (assets that will be pooled)”, substitute “, subsection 328-190(2) (assets that will be pooled) or subsection 328-237(2) (certain motor vehicles)”.
5 Subsection 328-250(2)
Omit “or subsection 328-190(2)”, substitute “, 328-190(2) or 328-237(2)”.
6 Paragraph 328-250(3)(b)
Omit “or 328-190(2)”, substitute “, 328-190(2) or 328-237(2)”.
7 Application of amendments
The amendments made by this Schedule apply in relation to entities and depreciating assets the entities started to hold (as defined in section 40-40 of the Income Tax Assessment Act 1997 ) in the 2012-13 income year and later income years.