INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART III - LIABILITY TO TAXATION  

Division 10D - Deductions for capital expenditure on certain buildings and structural improvements  

SECTION 124ZK   DEDUCTION IN RESPECT OF DESTRUCTION OF BUILDING  

124ZK(1)   [Amount of deduction - whole destroyed]  

Subject to this section and section 124ZJ , where:

(a) there is an amount of qualifying expenditure in respect of a building;

(b) during a year of income, the prescribed part is destroyed;

(c) immediately before the destruction, a taxpayer owned the prescribed part or a part (in this subsection referred to as the relevant part ) of the prescribed part;

(d) at any time before the destruction, the taxpayer dealt with the prescribed part or the relevant part, as the case may be, in the prescribed manner;

(e) if the taxpayer did not deal with the prescribed part or the relevant part, as the case may be, in the prescribed manner immediately before the time of the destruction, no part of the prescribed part or of the relevant part, as the case may be, that, at the time (in this paragraph referred to as the relevant time ) when the prescribed part or the relevant part, as the case may be, was last dealt with in the prescribed manner, was used for the purpose of producing assessable income or carrying on research and development activities was used by any person for any purpose after the relevant time and before the time of the destruction;

(f) in a case where the taxpayer owned the whole of the prescribed part immediately before the time of the destruction, so much of the residual capital expenditure at that time in relation to the amount of qualifying expenditure as is attributable to the prescribed part exceeds the amount (if any) received or receivable by the taxpayer (under a policy of insurance or otherwise) in respect of the destruction of the prescribed part; and

(g) in a case where the taxpayer owned a part only of the prescribed part immediately before the time of the destruction, so much of the residual capital expenditure at that time in relation to the amount of qualifying expenditure as is attributable to the relevant part exceeds the amount (if any) received or receivable by the taxpayer (under a policy of insurance or otherwise) in respect of the destruction of the relevant part;

the taxpayer is entitled, in his assessment in respect of income of the year of income, to a deduction of an amount equal to:

(h) in a case to which paragraph (f) applies - the excess referred to in that paragraph; and

(j) in a case to which paragraph (g) applies - the excess referred to in that paragraph.

124ZK(2)   [Amount of deduction - part destroyed]  

Subject to this section and section 124ZJ , where:

(a) there is an amount of qualifying expenditure in respect of a building;

(b) during a year of income, a part (in this subsection referred to as the destroyed part ) of the prescribed part is destroyed;

(c) immediately before the destruction, a taxpayer owned the destroyed part or a part (in this subsection referred to as the relevant part ) of the destroyed part;

(d) at any time before the destruction, the taxpayer dealt with the destroyed part or the relevant part, as the case may be, in the prescribed manner;

(e) if the taxpayer did not deal with the destroyed part or the relevant part, as the case may be, in the prescribed manner immediately before the time of the destruction, no part of the destroyed part or of the relevant part, as the case may be, that, at the time (in this paragraph referred to as the relevant time ) when the destroyed part or the relevant part, as the case may be, was last dealt with in the prescribed manner, was used for the purpose of producing assessable income or carrying on research and development activities was used by any person for any purpose after the relevant time and before the time of the destruction;

(f) in a case where the taxpayer owned the whole of the destroyed part immediately before the time of the destruction, so much of the residual capital expenditure at that time in relation to the amount of qualifying expenditure as is attributable to the destroyed part exceeds the amount (if any) received or receivable by the taxpayer (under a policy of insurance or otherwise) in respect of the destruction of the destroyed part; and

(g) in a case where the taxpayer owned a part only of the destroyed part immediately before the time of the destruction, so much of the residual capital expenditure at that time in relation to the amount of qualifying expenditure as is attributable to the relevant part exceeds the amount (if any) received or receivable by the taxpayer (under a policy of insurance or otherwise) in respect of the destruction of the relevant part;

the taxpayer is entitled, in his assessment in respect of income of the year of income, to a deduction of an amount equal to:

(h) in a case to which paragraph (f) applies - the excess referred to in that paragraph; and

(j) in a case to which paragraph (g) applies - the excess referred to in that paragraph.

124ZK(3)   [Amount received re destruction of property]  

Where:

(a) a building or a part of a building is destroyed; and

(b) an amount is received or receivable by a person who, immediately before the time of the destruction, owned the whole or a part of the building in respect of the disposal of any property (in this subsection referred to as the relevant property ) that, immediately before the destruction, formed part of the building or of that part of the building, as the case may be, that was destroyed;

the amount so received or receivable, reduced by any demolition costs incurred in respect of the relevant property, shall be taken to be an amount received or receivable by the person in respect of the destruction of the property of which the relevant property so formed part.

124ZK(4)   [Amount received under policy of insurance]  

Where:

(a) an amount is received or receivable by a person under a policy of insurance or otherwise in respect of the destruction of property; and

(b) it is required to be determined for the purposes of this Division how much of the amount received or receivable was received or is receivable in respect of part of the property referred to in paragraph (a),

so much of the amount referred to in paragraph (a) as, in the opinion of the Commissioner, relates to the part of the property referred to in paragraph (b) shall be taken to have been received or to be receivable, as the case may be, by the person in respect of the part of the property referred to in paragraph (b).