INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART III - LIABILITY TO TAXATION  

Division 10AA - Prospecting and mining for petroleum  

SECTION 124AD   DEDUCTION OF RESIDUAL PREVIOUS CAPITAL EXPENDITURE  

124AD(1)   [Allowable deduction]  

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

124AD(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 previous 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.

124AD(2)   [Calculation]  

Subject to subsection (3), the deduction allowable is the amount ascertained by dividing the amount of residual previous 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 25, whichever number is the less.

124AD(3)   [Maximum deduction]  

The amount, or the total of the amounts, of the deduction or deductions allowable under this section shall not exceed an amount equal to so much of the assessable income from petroleum derived by the taxpayer in the year of income as remains after deducting from that assessable income from petroleum all deductions allowable otherwise than under this section, section 124ADB , section 124ADD , section 124ADF , section 124ADG and section 124AH in respect of that assessable income from petroleum, 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.

124AD(4)   [Deductions under other sections]  

The reference in subsection (3) to all deductions allowable otherwise than under this section, section 124ADB , section 124ADD , section 124ADF , section 124ADG and section 124AH in respect of the assessable income from petroleum derived by a taxpayer in a year of income is a reference to:

(a) any deductions allowable otherwise than under this section, section 124ADB , section 124ADD , section 124ADF , section 124ADG and section 124AH from the assessable income of the taxpayer of that year of income that relate exclusively to that assessable income from petroleum; and

(b) so much of any other deduction allowable otherwise than under this section, section 124ADB , section 124ADD , section 124ADF , section 124ADG and section 124AH from the assessable income of the taxpayer of that year of income as, in the opinion of the Commissioner, may appropriately be related to that assessable income from petroleum,

and includes a reference to any deductions allowable under sections 124AF and 124AM .

124AD(5)   [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 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.