Commonwealth Numbered Acts

Income Tax Assessment Amendment Act 1983 No. 14 of 1983 - SECT 36

36. After section 124ADF of the Principal Act the following section is
inserted: Deduction of allowable (post 19 July 1982) capital expenditure

''124ADG. (1) In this section, 'allowable (post 19 July 1982) capital
expenditure', in relation to a taxpayer, means allowable capital expenditure
incurred by the taxpayer after 19 July 1982, not being expenditure incurred-

   (a)  under a contract entered into on or before 19 July 1982; or

   (b)  in respect of the construction of property by the taxpayer where that
        construction commenced on or before 19 July 1982.

''(2) Where, in a year of income, a taxpayer incurs allowable (post 19 July
1982) capital expenditure, an amount ascertained in accordance with this
section is an allowable deduction in respect of that expenditure in respect of
that year of income and in respect of subsequent years of income.

''(3) Subject to sub-section (6), the deduction allowable under sub-section
(2) in respect of a year of income (in this sub-section referred to as the
'relevant year of income') in respect of an amount of allowable (post 19 July
1982) capital expenditure incurred by a taxpayer is the amount ascertained by
dividing the amount of that expenditure that is unrecouped as at the end of
the relevant year of income by-

   (a)  a number equal to the difference between 10 and the number of years of
        income (if any) preceding the relevant year of income in respect of
        which a deduction has been allowed or is allowable, or, but for the
        operation of sub-section (6), would have been allowed or would be
        allowable, under sub-section (2) in respect of that amount of
        expenditure; or

   (b)  a number equal to the number of whole years in the estimated life of
        the petroleum field or proposed petroleum field as at the end of the
        relevant year of income, whichever number is the less.

''(4) For the purposes of sub-section (3), the amount of the allowable (post
19 July 1982) capital expenditure incurred by a taxpayer that is unrecouped as
at the end of a year of income (in this sub-section referred to as the
'relevant year of income') shall be ascertained by deducting from the amount
of that allowable (post 19 July 1982) capital expenditure the sum of-

   (a)  any part of that allowable (post 19 July 1982) capital expenditure
        that-

        (i)    has been allowed or is allowable, or, but for the operation of
               sub-section (6), would have been allowed or would be allowable,
               as a deduction under sub-section (2) in respect of a year of
               income preceding the relevant year of income; or

        (ii)   was incurred on property (not being property in respect of
               which a notice has been duly given to the Commissioner under
               section 124AB by the taxpayer and a person who acquired the
               property from the taxpayer)-

                (A)  that has been disposed of, lost or destroyed; or

                (B)  the use of which by the taxpayer for the purposes of
                     carrying on prescribed petroleum operations has been
                     otherwise terminated,

and has not been allowed and is not allowable as a deduction under sub-section
(2) in respect of a year of income preceding the relevant year of income; and

   (b)  so much of any amounts specified in notices duly given to the
        Commissioner under section 124AB in relation to the acquisition from
        the taxpayer, during the relevant year of income or a year of income
        preceding the relevant year of income, of a petroleum prospecting or
        mining right or petroleum prospecting or mining information as-

        (i)    is attributable to that allowable (post 19 July 1982) capital
               expenditure; and

        (ii)   has not been allowed and is not allowable as a deduction under
               sub-section (2) in respect of a year of income preceding the
               relevant year of income.

''(5) For the purposes of sub-paragraphs (4) (a) (ii) and (4) (b) (ii), an
amount that would have been allowed or allowable as a deduction under
sub-section (2) but for the operation of sub-section (6) shall be deemed to
have been allowed or to be allowable as such a deduction.

''(6) The amount, or the total of the amounts, of the deduction or deductions
allowable under sub-section (2) in respect of a year of income (including any
amount that is deemed to be a deduction so allowable by virtue of sub-section
(7)) shall not exceed an amount equal to so much of the assessable income of
the year of income as remains after deducting all allowable deductions, other
than deductions allowable under this section or under section 124AH, and,
where the total of the amounts of 2 or more deductions that would be allowable
under this section but for this sub-section exceeds the maximum amount
determined in accordance with this sub-section, those deductions shall be
reduced respectively by amounts proportionate to those deductions and equal in
total to the excess.

''(7) Subject to sub-sections (8) and (9), where the whole or a part of a
deduction in respect of a year of income is disallowed under sub-section (6),
that whole or part shall be deemed to be a deduction that is allowable under
sub-section (2) in respect of the next succeeding year of income.

''(8) Where-

   (a)  an amount of allowable (post 19 July 1982) capital expenditure was
        incurred by a taxpayer on property (not being property in respect of
        which a notice has been duly given to the Commissioner under section
        124AB) that, during a year of income, has been disposed of, lost or
        destroyed or the use of which by the taxpayer for the purposes of
        carrying on prescribed petroleum operations has been otherwise
        terminated; and

   (b)  the whole or a part of an amount (which whole or part is in this
        sub-section referred to as the 'relevant amount') in respect of which
        a deduction would, but for this sub-section, be allowable to the
        taxpayer in that year of income or in a succeeding year of income by
        virtue of the operation of sub-section (7) is attributable to the
        amount referred to in paragraph (a), a deduction is not allowable to
        the taxpayer in respect of the relevant amount.

''(9) Where-

   (a)  an amount is specified in a notice duly given to the Commissioner
        under section 124AB in relation to the acquisition from a taxpayer,
        during a year of income, of a petroleum prospecting or mining right or
        petroleum prospecting or mining information; and

   (b)  the whole or a part of an amount (which whole or part is in this
        sub-section referred to as the 'relevant amount') in respect of which
        a deduction would, but for this sub-section, be allowable to the
        taxpayer in that year of income or in a succeeding year of income by
        virtue of the operation of sub-section (7) is attributable to the
        amount referred to in paragraph (a), a deduction is not allowable to
        the taxpayer in respect of the relevant amount.

''(10) Where-

   (a)  after 17 August 1976-

        (i)    a taxpayer has incurred allowable capital expenditure on
               property the use of which by the taxpayer for the purposes of
               carrying on prescribed petroleum operations has been
               terminated; or

        (ii)   a taxpayer has, otherwise than in carrying on prescribed
               petroleum operations, incurred expenditure of a capital nature
               on property, being expenditure that would have been allowable
               capital expenditure if it had been incurred in carrying on such
               operations; and

   (b)  the property has, after 19 July 1982, come into use by the taxpayer
        for purposes for which allowable capital expenditure may be incurred,
        so much of the expenditure referred to in sub-paragraph (a) (i) or
        (ii), as the case may be, as the Commissioner determines shall, for
        the purposes of this section, be deemed to have been incurred by the
        taxpayer on that property, on the day on which that property so came
        into use by the taxpayer, for the purposes for which that property so
        came into use.

''(11) Where, having regard to the information in his possession, the
Commissioner is not satisfied that the estimated life of a petroleum field or
a proposed petroleum field as made by the taxpayer is a reasonable estimate,
the estimated life shall, for the purposes of paragraph (3) (b), be taken to
be such period as the Commissioner considers reasonable.''.