Taxation Laws Amendment Act (No. 3) 1992 (98 of 1992)
Part 2 AMENDMENT OF THE INCOME TAX ASSESSMENT ACT 1936
Division 8 Amendments relating to deductions for capital expenditure on traveller accommodation
41 Deductions in respect of capital expenditure
Section 124ZC of the Principal Act is amended:
(a) by inserting in paragraphs (1)(a), (2)(a), (3)(a) and (4)(a) "pre-18 July 1985" before "qualifying";
(b) by inserting after subsection (2) the following subsection:"(2A) Subject to this section and section 124ZD, if:
(a) there is an amount of post-26 February 1992 qualifying hotel expenditure in respect of a building; and
(b) during a period in a year of income, a taxpayer:
(i) was the owner of the hotel part and used any part of the hotel part for the purpose of producing assessable income; or
(ii) was the owner of a part of the hotel part and used any part of that part of the hotel part for the purpose of producing assessable income;
a deduction is allowable to the taxpayer for the year of income equal to the amount worked out by:
(c) calculating, for each day (if any) in that period during the whole of which any part ('4% part') of the hotel part owned by the taxpayer was dealt with by the taxpayer in the prescribed manner, the amount worked out using the formula:
(Portion of qualifying expenditure / Days in year) * 0.04
where:
'Portion of qualifying expenditure' means so much of the qualifying hotel expenditure as is attributable to the 4% part;
'Days in year' means the number of days in the year of income; and
(d) calculating, for each day (if any) in that period during any part of which any part ('2.5% part') of the hotel part owned by the taxpayer was not dealt with by the taxpayer in the prescribed manner but was used by the taxpayer for the purpose of producing assessable income, the amount worked out using the formula:
(Portion of qualifying expenditure / Days in year) * 0.025
where:
'Portion of qualifying expenditure' means so much of the qualifying hotel expenditure as is attributable to the 2.5% part;
'Days in year' means the number of days in the year of income; and
(e) by adding the amounts calculated under paragraphs (c) and (d).";
(c) by inserting after subsection (4) the following subsection:"(4A) Subject to this section and section 124ZD, if:
(a) there is an amount of post-26 February 1992 qualifying apartment expenditure in respect of a building; and
(b) during a period in a year of income, a taxpayer:
(i) was the owner of the apartment part and used any part of the apartment part for the purpose of producing assessable income; or
(ii) was the owner of a part of the apartment part and used any part of that part of the apartment part for the purpose of producing assessable income;
a deduction is allowable to the taxpayer for the year of income equal to the amount worked out by:
(c) calculating, for each day (if any) in that period during the whole of which any part ('4% part') of the apartment part owned by the taxpayer was dealt with by the taxpayer in the prescribed manner, the amount worked out using the formula:
(Portion of qualifying expenditure / Days in year) * 0.04
where:
'Portion of qualifying expenditure' means so much of the qualifying apartment expenditure as is attributable to the 4% part;
'Days in year' means the number of days in the year of income; and
(d) calculating, for each day (if any) in that period during any part of which any part ('2.5% part') of the apartment part owned by the taxpayer was not dealt with by the taxpayer in the prescribed manner but was used by the taxpayer for the purpose of producing assessable income, the amount worked out using the formula:
(Portion of qualifying expenditure / Days in year) * 0.025
where:
'Portion of qualifying expenditure' means so much of the qualifying apartment expenditure as is attributable to the 2.5% part;
'Days in year' means the number of days in the year of income; and
(e) by adding the amounts calculated under paragraphs (c) and (d).";
(d) by omitting from subsection (5) "under this section" and substituting "under subsection (1), (2), (3) or (4)";
(e) by inserting after subsection (5) the following subsections:"(5A) A deduction allowable to a taxpayer under subsection (2A) in relation to a year of income in respect of so much of an amount of qualifying hotel expenditure as is attributable to the hotel part, or the part of the hotel part, mentioned in paragraph (2A)(b) must not exceed so much of the residual capital expenditure at whichever of the following times is applicable:
(a) if the taxpayer's ownership of the hotel part, or the part of the hotel part, as the case may be, commenced during the year of income – immediately after the time when that ownership commenced; or
(b) in any other case - the beginning of the year of income;
in relation to the amount of the qualifying hotel expenditure as is attributable to the hotel part or the part of the hotel part, as the case may be.
"(5B) A deduction allowable to a taxpayer under subsection (4A) in relation to a year of income in respect of so much of an amount of qualifying apartment expenditure as is attributable to the apartment part, or the part of the apartment part, mentioned in paragraph (4A)(b) must not exceed so much of the residual capital expenditure at whichever of the following times is applicable:
(a) if the taxpayer's ownership of the apartment part, or the part of the apartment part, as the case may be, commenced during the year of income - immediately after the time when that ownership commenced; or
(b) in any other case - the beginning of the year of income;
in relation to the amount of the qualifying partnership expenditure as is attributable to the apartment part or the part of the apartment part, as the case may be.".