INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART III - LIABILITY TO TAXATION  

Division 10AA - Prospecting and mining for petroleum  

SECTION 124AC   RESIDUAL PREVIOUS CAPITAL EXPENDITURE  

124AC(1)   [Ascertainment]  

For the purposes of this Division, but subject to the succeeding provisions of this section, the residual previous capital expenditure of a taxpayer as at the end of a year of income (in this section referred to as the relevant year of income ) shall be ascertained by deducting from the sum of:

(a) the amount of allowable capital expenditure (other than allowable capital expenditure to which paragraph (b) applies) incurred by the taxpayer on or before 17 August 1976 and before the end of the relevant year of income; and

(b) any amount of allowable capital expenditure that is deemed by subsection (2) to have been incurred by the taxpayer in the relevant year of income or in a preceding year of income;

the following amounts:

(c) any part of the expenditure included in that sum that:

(i) has been allowed or is allowable as a deduction under section 124AD from the assessable income 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 last-mentioned property from the taxpayer) that 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 has not been allowed and is not allowable as a deduction from the assessable income of any year of income that ended before the year of income in which the disposal, loss, destruction or termination of use took place;

(d) the sum of 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 preceding year of income, of a petroleum prospecting or mining right or petroleum prospecting or mining information as is attributable to expenditure that would, but for this paragraph, be included in the residual previous capital expenditure of the taxpayer as at the end of the relevant year of income; and

(e) the amount of subsidy received by the taxpayer in respect of expenditure incurred after 17 September 1974 (other than expenditure incurred before 1 July 1976 in pursuance of a contract made on or before 17 September 1974, being a contract under which property was to be acquired by, or work was to be performed for, the taxpayer) being amounts received before or during the relevant year of income under agreements entered into under an Act relating to the search for petroleum, reduced by any amounts of such subsidy repaid by the taxpayer before or during the relevant year of income.

124AC(2)   [Commissioner's apportionment]  

Where:

(a) on or before 17 August 1976:

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

(ii) the taxpayer, 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 17 September 1974, come into use by the taxpayer for purposes for which allowable capital expenditure may be incurred,

so much of that expenditure as the Commissioner determines shall be deemed to have been incurred by the taxpayer in respect of that property, during the year of income in which the property so came into use by the taxpayer, for the purposes for which the property so came into use.

124AC(3)   [Section 122N not prejudicial]  

Nothing contained in section 122N prejudices the operation of subsection (2).