INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART III - LIABILITY TO TAXATION  

Division 10AA - Prospecting and mining for petroleum  

SECTION 124ADB   DEDUCTION OF RESIDUAL CAPITAL EXPENDITURE  

124ADB(1)   [Allowable deduction]  

Where, as at the end of the year of income, there is, in relation to a taxpayer, an amount of residual capital expenditure, an amount ascertained in accordance with this section is an allowable deduction.

124ADB(1A)   [No application from 1997/98 year]  

A deduction is not allowable under subsection (1) for the 1997-98 year of income or any later year of income.

Note:

Section 330-1 of the Income Tax (Transitional Provisions) Act 1997 converts any undeducted residual capital expenditure at the end of the 1996-97 year of income into allowable capital expenditure incurred by a taxpayer in the 1997-98 year of income.

124ADB(2)   [Calculation]  

Subject to subsection (3), the deduction allowable is the amount ascertained by dividing the amount of residual capital expenditure referred to in subsection (1) by a number equal to the number of whole years in the estimated life of the petroleum field or proposed petroleum field as at the end of the year of income or by 5, whichever number is the less.

124ADB(3)   [Maximum deduction]  

The amount of the deduction, or the total of the amounts of the deductions, allowable under this section shall not exceed an amount equal to so much of the assessable income of the taxpayer of the year of income as remains after deducting from that assessable income all deductions allowable otherwise than under this section and sections 124ADD , 124ADF , 124ADG and 124AH in respect of that assessable income and, where the total of the amounts of 2 or more deductions that would be allowable under this section but for this subsection exceeds the maximum amount determined in accordance with this subsection, those deductions shall be reduced respectively by amounts proportionate to those deductions and equal in total to the excess.

124ADB(4)   [Commissioner's discretion]  

Where, having regard to the information in his possession, the Commissioner is not satisfied that the estimated life of a petroleum field or proposed petroleum field as made by the taxpayer is a reasonable estimate, the estimated life shall, for the purposes of subsection (2), be taken to be such period as the Commissioner considers reasonable.