Income Tax Assessment 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-J - Capital expenditure for the establishment of trees in carbon sink forests  

Operative provisions

SECTION 40-1030   Extra deduction for destruction of trees in carbon sink forest  

40-1030(1)  
You can deduct the amount worked out under subsection (2) for an income year if:


(a) you or another entity incurred capital expenditure that is covered under section 40-1010 in relation to particular trees; and


(b) you use the land occupied by the trees for the primary and principal purpose of *carbon sequestration by the trees; and


(c) the trees are destroyed during the income year; and


(d) you satisfy a condition in subsection 40-1005(5) for the trees just before they are destroyed.

40-1030(2)  
Work out the amount of the deduction as follows: Method statement


Step 1.

Work out the total of the amounts you could have deducted under this Subdivision in relation to the trees for the period:

  • (a) starting on the first day of the income year in which the trees are established; and
  • (b) ending when the trees were destroyed;
  • assuming that, during that period, you satisfied a condition in the table in subsection 40-1005(5) .


    Step 2.

    Subtract from the expenditure that is covered under section 40-1010 in relation to the trees:

  • (a) the result from step 1; and
  • (b) any amount you received (under an insurance policy or otherwise) for the destruction.
  • The remaining amount (if positive) is your deduction under subsection (1).

    40-1030(3)  
    This deduction is in addition to any deduction for the income year under section 40-1005 .


     

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