INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART III - LIABILITY TO TAXATION  

Division 3 - Deductions  

Subdivision A - General  

SECTION 62AAA   PROVISIONS RELATING TO COMPENSATION PAYMENTS FOR CONVERSION OF PLANT FOR USE IN CONNEXION WITH THE DECIMAL CURRENCY SYSTEM  

62AAA(1)   [Definitions]  

In this section -

"compensation payment"
, in relation to a unit of property, means a payment received by the taxpayer in respect of the unit in pursuance of the Decimal Currency Board Act 1963-1965 ; and

"unit of property"
means a unit of property not being trading stock of the taxpayer.

62AAA(2)   [Reduction of depreciated value of property]  

For the purpose of calculating the depreciation allowable under this Act in respect of a unit of property in respect of which a compensation payment has been, or is, or compensation payments have been, or are, received by the taxpayer during a year of income, the depreciated value of the unit at the end of that year of income shall be deemed to have been, or to be, as the case may be, reduced by so much of the amount of that payment, or of the sum of the amounts of those payments, as does not exceed the amount that, but for this subsection, would have been, or would be, as the case may be, the depreciated value of the unit at the end of that year of income.

62AAA(3)   [Where compensation exceeds depreciated value]  

Where the amount of a compensation payment that has been, or is, or the sum of the amounts of any compensation payments that have been, or are, received by a taxpayer during a year of income in respect of a unit of property exceeds the amount that, but for subsection (2), would have been, or would be, as the case may be, the depreciated value of the unit at the end of that year of income, the Commissioner shall successively reduce the respective depreciated values, at the end of that year of income, of -

(a) any unit of property acquired by the taxpayer during that year of income to replace the first-mentioned unit of property;

(b) any other unit of property acquired by the taxpayer during that year of income, being a unit of property of a description, or having a use, similar to that of the first-mentioned unit of property;

(c) any other unit of property acquired by the taxpayer during that year of income;

(d) any other unit of property owned by the taxpayer, being a unit of property of a description, or having a use, similar to that of the first-mentioned unit of property; and

(e) any other units of property owned by the taxpayer,

by such amounts as are not, in the aggregate, greater than the amount of the excess.

62AAA(4)   [Residue of compensation assessable]  

An amount equal to so much, if any, of the amount of the excess referred to in subsection (3) as is greater than the sum of the reductions made under that subsection shall be included in the assessable income of the taxpayer of the year of income referred to in that subsection.

62AAA(5)   [Compensation in year of loss, destruction or disposal]  

Where a unit of property of the taxpayer has been, or is, disposed of, lost or destroyed and the taxpayer has received, or receives, a compensation payment in respect of the unit in the year of income in which the disposal, loss or destruction took place or takes place -

(a) the depreciated value of the unit immediately before the disposal, loss or destruction shall be deemed to have been reduced by so much of the amount of the compensation payment as does not exceed the amount that, but for this paragraph, would have been, or would be, as the case may be, that depreciated value; and

(b) if the compensation payment exceeds that last-mentioned amount -

(i) the Commissioner shall successively reduce the respective depreciated values, at the end of that year of income, of the units of property referred to in paragraphs (3)(a) to (e), inclusive, by such amounts as are not, in the aggregate, greater than the amount of the excess; and

(ii) an amount equal to so much, if any, of the amount of the excess as is greater than the sum of the reductions made under subparagraph (i) shall be included in the assessable income of the taxpayer of that year of income.

62AAA(6)   [Compensation in year succeeding loss, destruction or disposal]  

Where a unit of property of the taxpayer has been, or is, disposed of, lost or destroyed and the taxpayer has received, or receives, a compensation payment in respect of the unit in a year of income succeeding the year of income in which the disposal, loss or destruction took place or takes place, subsections (3) and (4) do not apply in relation to that payment but -

(a) the Commissioner shall successively reduce the respective depreciated values, at the end of the year of income in which the payment was, or is, received, of -

(i) any unit of property acquired by the taxpayer during that year of income to replace the first-mentioned unit of property;

(ii) any other unit of property acquired by the taxpayer during that year of income, being a unit of property of a description, or having a use, similar to that of the first-mentioned unit of property;

(iii) any other unit of property acquired by the taxpayer during that year of income;

(iv) any other unit of property owned by the taxpayer, being a unit of property of a description, or having a use, similar to that of the first-mentioned unit of property; and

(v) any other units of property owned by the taxpayer,

by such amounts as are not, in the aggregate, greater than the amount of the payment; and

(b) an amount equal to so much, if any, of the amount of the payment as is greater than the sum of the reductions made under paragraph (a) shall be included in the assessable income of the taxpayer of the year of income in which the payment was, or is, received.

62AAA(7)   [Conditions for reduction of depreciated value]  

The depreciated value of a unit of property shall not be reduced under subsection (3), paragraph (5)(b) or subsection (6) unless -

(a) at the end of the year of income, the unit was used exclusively for the purpose of producing assessable income or had been installed ready for use exclusively for that purpose and was held in reserve; and

(b) depreciation under this Act is allowable to the taxpayer in respect of the unit.

62AAA(8)   [Reduction deemed depreciation]  

An amount by which the depreciated value of a unit of property has been reduced in pursuance of this section shall, for the purposes of this Act, be deemed to be depreciation that has been allowed in respect of that unit in the assessment in which the reduction was made.