INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART III - LIABILITY TO TAXATION  

Division 10 - Mining and quarrying  

Subdivision C - General provisions  

SECTION 122K   DISPOSAL, LOSS, DESTRUCTION OR TERMINATION OF USE OF PROPERTY  

122K(1)   [Section applies to disposal, etc, of property]  

This section applies where deductions have been allowed or are allowable, under this Division or under provisions of a previous law of the Commonwealth relating to the taxation of income derived from mining operations, in respect of expenditure of a capital nature by the taxpayer in respect of property of the taxpayer which, in the year of income, has been disposed of, lost or destroyed, or the use of which by the taxpayer for prescribed purposes or eligible purposes has, in the year of income, been otherwise terminated.

122K(1A)   [Relevant event to occur before end 1996/97 year]  

The disposal, loss or destruction of the property, or the termination of use of the property by the taxpayer for prescribed purposes or eligible purposes, must have occurred in the 1996-97 year of income or an earlier year of income.

Note:

Subdivision 330-J of the Income Tax Assessment Act 1997 deals with balancing adjustments for the 1997-98 year of income and later years of income.

122K(2)   [Assessable income]  

Where the aggregate of:


(a) the sum of the deductions so allowed or allowable; and


(b) the consideration receivable in respect of the disposal, loss or destruction or, in the case of other termination of the use of property, the value of the property at the date of termination of use;

exceeds the total expenditure of a capital nature of the taxpayer in respect of that property, so much of the amount of the excess as does not exceed the sum of those deductions shall be included in the assessable income.

122K(3)   [Allowable deduction]  

Where the total expenditure exceeds that aggregate, the excess shall be an allowable deduction.

122K(4)   [Definitions]  

In this section:

eligible purposes
has the same meaning as in Subdivision B.

expenditure
does not include expenditure in connexion with coal-mining operations incurred before the year of income that commenced on 1 July 1951.

mining or prospecting right
has the same meaning as in Subdivision A.

prescribed purposes
has the same meaning as in Subdivision A.

property
includes:


(a) a mining or prospecting right; or


(b) a quarrying or prospecting right.

quarrying or prospecting right
has the same meaning as in Subdivision B.

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

the consideration receivable in respect of the disposal, loss or destruction
means:


(a) where the property is sold (whether with or without other property) for a specified price - the sale price of the property, less the expenses of the sale of the property, or such part of the expenses of the sale of the property together with the other property as the Commissioner determines;


(b) where the property is sold with other property and a specified price is not allocated to the property - such part of the total sale price, less the expenses of the sale, as the Commissioner determines;


(c) where the property is disposed of otherwise than by sale - the value, if any, of the property at the date of disposal; or


(d) where the property is lost or destroyed - the amount or value received or receivable under a policy of insurance or otherwise in respect of the loss or destruction,

but does not include an amount that is included, or will, when received, be included, in the assessable income of any year of income under section 26AB or Division 4 .

122K(5)   [Use of property for prescribed purposes]  

For the purposes of subsection (1), use of property by a taxpayer is taken to be use for prescribed purposes if:


(a) the use is on or after 1 July 1991; and


(b) the use is for rehabilitation-related activities in relation to a site on which the taxpayer conducted:


(i) prescribed mining operations within the meaning of Subdivision A; or

(ii) activities in respect of which a deduction is allowable, or has been allowed, under section 122J ; and


(c) either of the following conditions is satisfied:


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

(ii) the property is housing and welfare within the meaning of Subdivision A.

122K(6)   [Use of property for eligible purposes]  

For the purposes of subsection (1), use of property by a taxpayer is taken to be use for eligible purposes if:


(a) the use is on or after 1 July 1991; and


(b) the use is for rehabilitation-related activities in relation to a site on which the taxpayer conducted activities in respect of which a deduction is allowable, or has been allowed, under section 122JF ; and


(c) the property is plant or articles for the purposes of section 54 .

122K(7)   [Property held in reserve for particular purpose]  

A reference in subsection (5) or (6) 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.


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