INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART III - LIABILITY TO TAXATION  

Division 10A - Timber operations and timber mill buildings  

Subdivision A - Timber operations  

SECTION 124J   TIMBER FELLED UPON ACQUIRED LAND OR UNDER RIGHT  

124J(1)   [Allowable deduction]  

Where:

(a) a taxpayer has acquired:

(i) land carrying standing timber and part of the price paid for the land is attributable to that timber; or

(ii) a right to fell standing timber; and

(b) during the year of income, the whole or a part of the timber is felled:

(i) for sale, or for use in manufacture, by the taxpayer for the purpose of producing assessable income; or

(ii) in pursuance of a right to fell timber granted by the taxpayer to another person in consideration of payments to be made to the taxpayer as or by way of royalty;

so much of that part of the price so paid by the taxpayer to acquire the land, or so much of the amount paid by him to acquire the right, as the case may be, as is attributable to the timber felled during the year shall be an allowable deduction.

124J(2)   [Price paid for land greater than reasonable]  

For the purposes of subsection (1), if:

(a) the taxpayer acquired the land or the right, as the case may be, in a transaction where the parties did not deal with each other at arm's length in relation to the transaction; and

(b) the price paid by the taxpayer for the land or the right, as the case may be, was greater than was reasonable;

the price paid by the taxpayer for the land or the right, as the case may be, is taken to be the amount that would have been reasonable if the parties had dealt with each other at arm's length.