INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART III - LIABILITY TO TAXATION  

Division 10AAA - Transport of minerals and quarry materials  

Subdivision C - General provisions  

SECTION 123C   DISPOSAL, LOSS, DESTRUCTION OR TERMINATION OF USE OF PROPERTY  

123C(1)   [Application]  

This section applies where deductions have been allowed or are allowable under this Division in respect of expenditure and, in the year of income, property on which any of that expenditure was incurred has been disposed of, lost or destroyed, or the use of that property by the taxpayer primarily and principally for a purpose referred to in section 123A or 123BD has been otherwise terminated.

123C(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 primarily and principally for a purpose referred to in section 123A or 123BD , 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.

123C(2)   [Assessable income]  

Where the aggregate of:

(a) the sum of the deductions so allowed or allowable in respect of expenditure on the property so disposed of, lost or destroyed, or the use of which has been so terminated; 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 by the taxpayer on 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.

123C(3)   [Allowable deduction]  

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

123C(4)   [``consideration receivable'']  

In this section 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 the 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 which is included, or will, when received, be included, in the assessable income of any year of income under section 26AB or Division 4 .

123C(5)   [Expenditure prior to 1 July 1967]  

Where capital expenditure referred to in subsection 123A(1) was incurred prior to the year of income that commenced on 1 July 1967:

(a) for the purposes of this section, deductions shall be deemed to have been allowed under this Division in respect of that expenditure to the extent to which deductions in respect of that expenditure, or in respect of moneys appropriated for the purposes of that expenditure, have been allowed or are allowable under any provision of the Income Tax Assessment Act 1936 , or of that Act as amended by any Act up to and including the Income Tax Assessment Act (No. 4) 1967 ; and

(b) sections 59 and 122K do not apply in relation to property on which that expenditure was incurred.

123C(6)   [Property commencing to be re-used]  

Where property the use of which primarily and principally for a purpose referred to in section 123A has been terminated again comes into use primarily and principally for such a purpose, so much of the expenditure on that property as the Commissioner determines shall be deemed to be capital expenditure to which Subdivision A applies incurred in the year of income in which the property again comes into such use.

123C(7)   [Property re-used for purposes under s 123BD]  

Where property the use of which primarily and principally for a purpose referred to in section 123BD has been terminated again comes into use primarily and principally for such a purpose, so much of the expenditure on that property as the Commissioner determines is to be taken to be capital expenditure to which Subdivision B applies incurred in the year of income in which the property again comes into such use.