INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART III - LIABILITY TO TAXATION  

Division 10A - Timber operations and timber mill buildings  

Subdivision B - Timber mill buildings  

SECTION 124JA   DEDUCTION OF EXPENDITURE  

124JA(1)   [Construction or purchase of building]  

Where a person has incurred expenditure of a capital nature (not being expenditure in respect of which a deduction has been allowed or is allowable under a provision of this Act, other than a provision of this Subdivision, or which has been or is to be taken into account in ascertaining the amount of an allowable deduction under such a provision) in respect of the construction or purchase of a building:

(a) for use primarily and principally in carrying on a business of milling timber for the purpose of gaining or producing assessable income, including a building for use primarily and principally as residential accommodation by employees of the person who are engaged in, or in connexion with, that business, or by dependants of those employees; and

(b) situated in a forest and in or adjacent to the area where timber milled in the course of that business is or is to be felled;

deductions in respect of the expenditure are allowable in accordance with this section.

124JA(2)   [Amount of deduction]  

The deduction allowable in respect of a year of income is the amount ascertained by dividing the residual capital expenditure in respect of the building, as at the end of that year of income, ascertained in accordance with subsections (3) and (4), by:

(a) a number equal to the number of whole years, as at the end of that year of income, in the estimated period during which the building will be used for the purpose for which it was primarily and principally constructed or purchased; or

(b) 25;

whichever number is the less.

124JA(3)   [Residual capital expenditure]  

For the purposes of this section but subject to subsection (4), the residual capital expenditure in respect of a building as at the end of a year of income, or as at any time during a year of income, shall be ascertained by deducting from the amount of expenditure specified in subsection (1) incurred in respect of the building any part of that expenditure that has been allowed or is allowable as a deduction under this section from assessable income of a year of income before that year of income.

124JA(4)   [Expenditure prior to 1 July 1963]  

Where any expenditure specified in subsection (1) was incurred in respect of a building in a year of income prior to the year of income that commenced on l July l963, the residual capital expenditure in respect of that building at any time shall be deemed to be the amount that would have been the residual capital expenditure in respect of that building at that time if the provisions of this Subdivision had applied to assessments in respect of income of that first-mentioned year of income and to assessments in respect of income of each subsequent year of income.

124JA(5)   [Disposal or destruction of building]  

Where a building has been disposed of or destroyed, a deduction is not allowable under this section in respect of expenditure in respect of that building from the assessable income of the taxpayer of the year of income in which the disposal or destruction took place or of any succeeding year of income.

124JA(6)   [Termination of use for timber milling]  

Where the use of a building by a taxpayer for the purpose for which it was primarily and principally constructed or purchased has been terminated otherwise than by disposal or destruction, a deduction is not allowable under this section in respect of expenditure in respect of that building from the assessable income of the taxpayer of the year of income in which the termination of use took place or of any succeeding year of income in which the building was not used by the taxpayer for that purpose.