Taxation Laws Amendment Act (No. 3) 1992 (98 of 1992)

Part 2   AMENDMENT OF THE INCOME TAX ASSESSMENT ACT 1936

Division 9   Amendments relating to deductions for capital expenditure on industrial buildings

49   Deductions in respect of qualifying expenditure

Section 124ZH of the Principal Act is amended:

(a) by inserting in paragraphs (1)(a) and (2)(a) "pre-27 February 1992" before "qualifying expenditure";
          

(b) by inserting after subsection (2) the following subsection:
          

"(2A) Subject to this section and section 124ZJ, if:

(a) there is an amount of post-26 February 1992 qualifying expenditure in respect of a building; and

(b) during a period in a year of income, a taxpayer:

(i) was the owner of the prescribed part and dealt with any part of the prescribed part in the prescribed manner; or

(ii) was the owner of a part of the prescribed part and dealt with any part of that part of the prescribed part in the prescribed manner;

a deduction is allowable to the taxpayer for the year of income equal to the amount worked out by:

(c) calculating, for each day (if any) in that period during the whole of which any part ('4% part') of the prescribed part owned by the taxpayer was dealt with by the taxpayer in an eligible industrial manner, the amount worked out using the formula:

(Portion of qualifying expenditure / Days in year) * 0.04

where:

'Portion of qualifying expenditure' means so much of the qualifying expenditure as is attributable to the 4% part;

'Days in year' means the number of days in the year of income; and

(d) calculating, for each day (if any) in that period during any part of which any part ('2.5% part') of the prescribed part owned by the taxpayer was not dealt with by the taxpayer in an eligible industrial manner but was dealt with by the taxpayer in the prescribed manner, the amount worked out using the formula:

(Portion of qualifying expenditure / Days in year) * 0.025

where:

'Portion of qualifying expenditure' means so much of the qualifying expenditure as is attributable to the 2.5% part;

'Days in year' means the number of days in the year of income; and

(e) adding the amounts calculated under paragraphs (c) and (d).";

(c) by omitting from subsection (3) "this section" and substituting "subsection (1) or (2)";
          

(d) by inserting after subsection (3) the following subsection:
          

"(3A) A deduction allowable to a taxpayer under subsection (2A) in relation to a year of income in respect of so much of an amount of qualifying expenditure as is attributable to the prescribed part, or the part of the prescribed part, mentioned in paragraph (2A)(b), must not exceed so much of the residual capital expenditure at whichever of the following times is applicable:

(a) if the taxpayer's ownership of the prescribed part, or the part of the prescribed part, as the case may be, commenced during the year of income - immediately after the time when that ownership commenced; or

(b) in any other case - the beginning of the year of income;

in relation to the amount of the qualifying expenditure as is attributable to the prescribed part, or the part of the prescribed part, as the case requires.".