INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART III - LIABILITY TO TAXATION  

Division 10AA - Prospecting and mining for petroleum  

SECTION 124AMA   APPLICATION OF SECTION 124AM BEFORE 1 JULY 1991 - SUBSEQUENT USE OF PROPERTY FOR REHABILITATION  

124AMA(1)   [Application of section]  

This section applies to property if:

(a) either of the following conditions is satisfied:

(i) the property is plant or articles for the purposes of section 54 ;

(ii) expenditure on the property is covered by paragraph 124AA(2)(c) , (d) or (e); and

(b) section 124AM has applied in respect of the termination of use of the property; and

(c) the date of the termination (in this section called the section 124AM termination date ) was before 1 July 1991; and

(d) no deduction is allowable, or has been allowed, in respect of the use of the property that occurred in the period commencing on the section 124AM termination date and ending on 30 June 1991; and

(e) the taxpayer commences to use the property for rehabilitation-related activities on the day after the section 124AM termination date; and

(f) the taxpayer has not ceased to use the property for rehabilitation-related activities before 1 July 1991.

124AMA(2)   [Estimated eligible rehabilitation period]  

For the purposes of this section, the estimated eligible rehabilitation period is the period:

(a) commencing on 1 July 1991; and

(b) ending on the day on which, as at 1 July 1991, it is estimated that the property will cease to be used by the taxpayer for rehabilitation-related activities.

124AMA(3)   [Commissioner's discretion]  

If, having regard to information in the Commissioner's possession, the Commissioner is not satisfied that the estimate is a reasonable estimate, the estimated eligible rehabilitation period is taken to end on such day as the Commissioner considers reasonable.

124AMA(4)   [Estimated total rehabilitation period]  

For the purposes of this section, the estimated total rehabilitation period is the period:

(a) commencing on the day after the section 124AM termination date; and

(b) ending at the end of the estimated eligible rehabilitation period.

124AMA(5)   [Actual eligible rehabilitation period]  

For the purposes of this section, the actual eligible rehabilitation period is the period:

(a) commencing on 1 July 1991; and

(b) ending on the day on which the property is disposed of, lost or destroyed, or the use of which by the taxpayer for rehabilitation-related activities has been otherwise terminated.

124AMA(6)   [Actual total rehabilitation period]  

For the purposes of this section, the actual total rehabilitation period is the period:

(a) commencing on the day after the section 124AM termination date; and

(b) ending at the end of the actual eligible rehabilitation period.

124AMA(7)   [Allowable deduction]  

An amount calculated using the following formula is allowable as a deduction to the taxpayer for each year of income any part of which occurs during both the actual eligible rehabilitation period and the estimated eligible rehabilitation period:

Capital amount

×

Eligible rehabilitation days in year             Days in estimated total rehabilitation               period

where:

``Capital amount'' means the capital amount in relation to the property;

``Eligible rehabilitation days in year'' means the number of days in so much of the year of income as occurs during both of the actual eligible rehabilitation period and the estimated eligible rehabilitation period;

``Days in estimated total rehabilitation period'' means the number of days in the estimated total rehabilitation period.

124AMA(8)   [Application of subsec (9) and (10)]  

Subsections (9) and (10) apply in relation to a year of income if:

(a) deductions are allowable, or have been allowed, under subsection (7) in respect of the property; and

(b) the actual eligible rehabilitation period ends in the year of income.

124AMA(9)   [Allowable deduction where deduction previously allowed]  

The amount (if any) calculated using the following formula is an allowable deduction to the taxpayer for the year of income:

where:

``Capital amount'' means the capital amount in relation to the property;

``Actual eligible rehabilitation days'' means the number of days in the actual eligible rehabilitation period;

``Days in actual total rehabilitation period'' means the number of days in the actual total rehabilitation period;

`Deductions previously allowed'' means the total deductions that are allowable, or have been allowed, under subsection (7) in respect of the property.

124AMA(10)   [Amount included in assessable income]  

The amount (if any) calculated using the following formula is included in the assessable income of the taxpayer of the year of income:

Final value

×

Actual eligible rehabilitation days         Days in actual total rehabilitation             period

where:

``Final value'' means whichever of the following amounts is applicable in relation to the property:

(a) in the case of the disposal, loss or destruction of the property - the consideration receivable in respect of the disposal, loss or destruction; or

(b) in the case of other termination of the use of the property - the value of the property at the end of the actual eligible rehabilitation period;

``Actual eligible rehabilitation days'' means the number of days in the actual eligible rehabilitation period;

``Days in actual total rehabilitation period'' means the number of days in the actual total rehabilitation period.

124AMA(11)   [Property held in reserve for particular purpose]  

A reference in this section to use of property by a taxpayer for a particular purpose includes a reference to the holding in reserve of property owned by the taxpayer which has been installed ready for use for that purpose.

124AMA(12)   [Deemed income from petroleum]  

Where an amount is included in the assessable income of a taxpayer under subsection (10), the amount is taken to be assessable income from petroleum.

124AMA(13)   [Definitions]  

In this section:

actual eligible rehabilitation period
has the meaning given by subsection (5).

actual total rehabilitation period
has the meaning given by subsection (6).

capital amount
, in relation to property, means the lesser of:

(a) the total expenditure of a capital nature of the taxpayer in respect of the property; and

(b) the value of the property as at the section 124AM termination date.

estimated eligible rehabilitation period
has the meaning given by subsection (2).

estimated total rehabilitation period
has the meaning given by subsection (4).

rehabilitation-related activities
has the same meaning as in Division 10AB .

section 124AM termination date
has the meaning given by subsection (1).