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EZ 11: Amounts of depreciation recovery income and depreciation loss for part business use up to 2004–05 income year
or “Rules for calculating depreciation on partly business-used items owned before 2004-05”
You could also call this:

“Rules for claiming depreciation on items from associates before 23 September 1997”

If you get something from someone you know before 23 September 1997, and they could claim money back for it wearing out, there are some rules about how much you can claim.

You can’t claim more money back than the person you got it from could have claimed if they had kept it.

There are some times when these rules don’t apply. For example, if you got the item as part of a relationship agreement, or if it’s a special kind of property that makes money for the person you got it from.

If the person you got it from already claimed some money back for it wearing out, you can only claim based on what’s left over.

There’s a special rule for radio licences. If someone who manages radio frequencies gives a licence to someone they know, the price of the licence is treated as zero when working out how much it wears out. But this doesn’t apply if the government is managing the frequencies.

Remember, these rules are only for things you got on or before 23 September 1997.

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Next up: EZ 13: Annual rate for item acquired on or after 1 April 1993 and before end of person’s 1994–95 income year

or “Annual rate for depreciable items bought between April 1993 and 1995 tax year-end”
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Part E Timing and quantifying rules
Terminating provisions

EZ 12Amount of depreciation loss for item acquired from associated person on or before 23 September 1997

  1. This section applies when, on or before 23 September 1997, a person (person A) acquires an item from an associated person entitled to a deduction for an amount of depreciation loss for it.

  2. This section does not apply—

  3. if the item is acquired under a relationship agreement in circumstances to which section FB 21 (Depreciable property) applies; or
    1. if the item is listed in schedule 14 (Depreciable intangible property) and the price that person A pays is income of the associated person; or
      1. if the item is not listed in schedule 14 and the Commissioner is of the opinion that the circumstances are such that a person should be allowed a deduction for an amount of depreciation loss for the item based on the actual price or other consideration given for it.

        1. Whether or not the associated person has been allowed a deduction for an amount of depreciation loss, person A does not have a greater amount of depreciation loss for the item than that which the associated person would have had if the associated person had kept the item.

        2. If the associated person has an amount of depreciation loss that has been dealt with under section EE 48 (Effect of disposal or event), person A has an amount of depreciation loss for the item based on the total of—

        3. all amounts dealt with under section EE 48; and
          1. the depreciated value of the item immediately before person A acquired it.

            1. Subsection (6) applies when, on or before 23 September 1997, the holder of management rights created under the Radiocommunications Act 1989 grants a licence right under that Act to an associated person. However, it does not apply when the Crown acting by and through the Secretary of Commerce is named as the manager under section 11(1) of the Radiocommunications Act 1989.

            2. The price of the licence right is treated as being zero for the purposes of subpart EE (Depreciation).

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