INCOME TAX (TRANSITIONAL PROVISIONS) ACT 1997

CHAPTER 2 - LIABILITY RULES OF GENERAL APPLICATION  

PART 2-10 - CAPITAL ALLOWANCES: RULES ABOUT DEDUCTIBILITY OF CAPITAL EXPENDITURE  

Division 40 - Capital allowances  

Subdivision 40-B - Core provisions  

SECTION 40-75   Mining expenditure incurred after 1 July 2001 on an asset  

40-75(1)  
This section applies to you if:


(a) you hold a depreciating asset (except a mining, quarrying or prospecting right that you started to hold before 1 July 2001) that you:


(i) started to hold under a contract entered into before 1 July 2001; or

(ii) constructed where the construction started before that day; or

(iii) started to hold in some other way before that day; and


(b) your expenditure on the asset, whenever incurred, would have been allowable capital expenditure, transport capital expenditure or expenditure on exploration or prospecting within the meaning of Division 330 of the former Act if it had been incurred before 1 July 2001.

40-75(2)  
If you incur expenditure on the asset after 30 June 2001 that forms part of the cost of the asset, you can deduct the expenditure for the income year in which you incur it if it would have been expenditure on exploration or prospecting within the meaning of Division 330 of the former Act.

40-75(3)  
Otherwise, Subdivision 40-B of the new Act applies to the asset on the basis that it has a cost, and an adjustable value, of zero at the start of 1 July 2001, and an effective life on that day or at its start time, whichever is the later, worked out under subsection (4) of this section.

40-75(4)  
The effective life of the depreciating asset is the shorter of its effective life worked out under Division 40 and:


(a) if the expenditure on the asset was incurred in relation to eligible mining operations other than in the course of petroleum mining - the shorter of:


(i) 10 years; and

(ii) the number of whole years in the estimated life of the mine or proposed mine to which the expenditure relates or, if there is more than one such mine, of the mine that has the longest estimated life; or


(b) if the expenditure on the asset was incurred in relation to eligible mining operations in the course of petroleum mining - the shorter of:


(i) 10 years; and

(ii) the number of whole years in the estimated life of the petroleum field or proposed petroleum field to which the expenditure relates; or


(c) if the expenditure on the asset was incurred in relation to eligible quarrying operations - the shorter of:


(i) 20 years; or

(ii) the number of whole years in the estimated life of the quarry or proposed quarry to which the expenditure relates or, if there is more than one such quarry, of the quarry that has the longest estimated life.



This information is provided by CCH Australia Limited Link opens in new window. View the disclaimer and notice of copyright.