Income Tax Assessment Act 1997
You can deduct an amount if all or a part of * your area is destroyed in an income year and:
(a) you have been allowed, or can claim, a deduction under this Division, or former Division 10C or 10D of Part III of the Income Tax Assessment Act 1936 , for your area; and
(b) there is an amount of * undeducted construction expenditure for your area; and
(c) you were using your area in the way that applies to it under Table 43-140 (Current year use) immediately before the destruction or, if not, neither you nor any other entity used your area for any purpose since it was last used by you in that way.
The deduction is allowable in the income year in which the destruction occurs, and is calculated under section 43-250 .
The effect of this provision is to allow you to deduct an amount in the income year in which the capital works are destroyed for all of your construction expenditure that has not yet been deducted. However, you must reduce the deduction by any insurance and salvage receipts.