38Determining remaining effective life of major item of capital

38 Determining remaining effective life of major item of capital

38 Determining remaining effective life of major item of capital

(1) The remaining effective life of a major item of capital may be—

(a) estimated by the operator of the retirement village—

(i) having regard to the reasonable wear and tear expected to result from the circumstances of the use of the major item of capital, and

(ii) assuming that it will be maintained in reasonably good order and condition, and

(iii) having regard to the period within which it is likely to be scrapped, sold for no more than scrap value or abandoned, or

(b) determined as follows—

(i) for an item, other than a motor vehicle or trailer, for which there is a description in the Commonwealth Taxation Ruling, Schedule, Table A or Table B—the number of years specified in column 2 opposite the description that corresponds to the item,

(ii) for an item that is a motor vehicle or trailer for which there is a description in the Commonwealth Taxation Ruling, Schedule, Table B and a hash (#) symbol in column 3 opposite the item—the shorter period of—

(A) the number of years specified in column 2 opposite the item, or

(B) the number of years specified in the Income Tax Assessment Act 1997 of the Commonwealth, section 40-102(4), table, column 3.

(2) When determining if there is a description in the Commonwealth Taxation Ruling, Schedule, Table A or Table B that corresponds to a major item of capital, the operator of a retirement village must follow the methodology set out in the ruling under the heading “How to use Tables A and B”.

(3) The operator of a retirement village must keep information showing the way the remaining effective life of each major item of capital is calculated.

(4) The operator of a retirement village who estimates the remaining effective life of a major item of capital in accordance with subsection (1)(a) must be able to demonstrate that the estimate is reasonable.

(5) The operator of a retirement village must make the information kept under subsection (3) available to a resident within 7 days after the resident requests the information.