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INCOME TAX ASSESSMENT ACT 1936 - SECT 159GJ Effect of application of Division on certain deductions etc.

INCOME TAX ASSESSMENT ACT 1936 - SECT 159GJ

Effect of application of Division on certain deductions etc.

  (1)   Where this Division   applies in relation to an item of eligible depreciation property:

  (b)   in relation to any year of income the whole of which is included in or comprises the application period--no depreciation deduction shall be allowable to any taxpayer in relation to the item of property for that year of income;

  (c)   in relation to any other year of income in which the whole or a part of the application period occurs:

  (i)   in relation to any part (in this subsection referred to as the pre - application part ) of the year of income that precedes the application period--there shall be allowable to a taxpayer as a depreciation deduction in relation to the item of property:

  (A)   where this Division   has not previously applied in relation to the item of property--the same depreciation deduction (if any) as would, apart from this Division, be allowable to the taxpayer; and

  (B)   in any other case--the same depreciation deduction (if any) as would, but for this application of this section, be allowable to the taxpayer;

  (ii)   in relation to the part of the year of income during which this Division   applies--no depreciation deduction shall be allowable to any taxpayer in relation to the item of property; and

  (iii)   in relation to any part (in this subsection referred to as the post - application part ) of the year of income that occurs after the application period (not being a part that occurs after the commencement of a subsequent application period):

  (A)   the residual amount in relation to the item of eligible depreciation property at any time (in this sub - subparagraph referred to as the relevant time ) during the post - application part   is an amount ascertained in accordance with the formula:

    Start formula A plus B minus C end formula

    where:

    A is the amount that, but for this application of this section, would be the residual amount at the relevant time in relation to the eligible amount (in this subparagraph referred to as the relevant eligible amount ) by reason of which the item is an item of eligible depreciation property.

    B is:

  (a)   where paragraph   (b) of this component does not apply--the amount that, in determining the residual amount in component A, would be taken into account as depreciation under subsection   159GF(1) in respect of the application period; and

  (b)   where, in determining the residual amount in component A, depreciation deductions taken into account in respect of the post - application part would be calculated under this Act or the Income Tax Assessment Act 1997 using the diminishing value method--the amount that, in determining the residual amount in component A, would be taken into account under subsection   159GF(1) as depreciation deductions in respect of the application period and the part of the post - application part before the relevant time; and

    C is:

  (a)   where paragraph   (a) of component B applies--an amount equal to the total notional principal in relation to the relevant eligible amount in relation to the application period; and

  (b)   where paragraph   (b) of component B applies--the sum of:

  (i)   the total notional principal in relation to the relevant eligible amount in relation to the application period; and

  (ii)   the amount that, in determining the residual amount in component A, would be taken into account as depreciation deductions under subsection   159GF(1) in respect of the part of the post - application part before the relevant time if the depreciated value under this Act, the undeducted cost under the former Division   42 of the Income Tax Assessment Act 1997 or the adjustable value under Division   40 of that Act, of the item of eligible depreciation property at the beginning of the year of income in which this Division   ceases to apply were equal to the residual amount at the beginning of the application period as reduced by the total notional principal in relation to the relevant eligible amount in relation to the application period;

  (B)   for the purposes of any application of this Act or the Income Tax Assessment Act 1997 , in relation to the item of property in relation to the post - application part--the depreciated value, within the meaning of Division   3 of this Part, the undeducted cost under the former Division   42 of the Income Tax Assessment Act 1997 or the adjustable value under Division   40 of that Act, of the item of property at any time during the post - application part shall be taken to be an amount equal to the residual amount in relation to the relevant eligible amount at that time as ascertained in accordance with sub - subparagraph   (A); and

  (C)   the depreciation deduction (if any) allowable to a taxpayer in relation to the item of property in relation to the post - application part   is the depreciation deduction that would be allowable in respect of that period if this Division   did not apply and, in the case of an item of property in relation to which the former paragraph   56(1)(a) of this Act or the diminishing value method under the former Division   42, or Division   40, of the Income Tax Assessment Act 1997 would, apart from this Division, apply, if the depreciated value, within the meaning of the former section   62 of this Act, the undeducted cost, under the former Division   42 of the Income Tax Assessment Act 1997 or the adjustable value under Division   40 of that Act, of the item of property at the beginning of the year of income were equal to the residual amount, as ascertained under sub - subparagraph   (A), in relation to the relevant eligible amount at the commencement of the post - application part;

  (d)   the residual amount at any time (in this paragraph referred to as the relevant time ) after the year of income in which the application period ends (not being a time after the commencement of a subsequent application period) in relation to the eligible amount (in this paragraph referred to as the relevant eligible amount ) by reason of which the item is an item of eligible depreciation property is the amount that would be the residual amount in relation to the relevant eligible amount in relation to the relevant time under sub - subparagraph   (1)(c)(iii)(A) if the post - application part referred to in that sub - subparagraph extended to include the relevant time; and

  (e)   for the purpose of the application of this Act and the Income Tax Assessment Act 1997 in relation to the item of property at any time after the year of income in which the application period ends--there shall be taken to have been allowed as a depreciation deduction in relation to the item of property in relation to the application period an amount equal to the total notional principal in relation to the eligible amount by reason of which the item of property is eligible depreciation property in relation to the application period.

  (2)   Where this Division   applies in relation to an item of Division   10, 10AA or 10A property:

  (a)   no deduction is allowable to any taxpayer under:

  (ii)   section   40 - 830 of the Income Tax Assessment Act 1997 for a project amount that is mining capital expenditure within the meaning of that Act; or

  (iii)   Subdivision   40 - B of that Act for a depreciating asset that is a forestry road or timber mill building;

    in relation to any amount of expenditure (not being expenditure incurred after the application period) by reason of which the item is Division   10, 10AA or 10A property for any year of income in which the whole or a part of the application period occurs;

  (b)   the residual amount at any time after the application period (not being a time after the commencement of a subsequent application period) in relation to an amount of expenditure (not being expenditure incurred after the application period) by reason of which the item is Division   10, 10AA or 10A property is an amount equal to the amount that, but for this paragraph, would be the residual amount at that time in relation to the amount of expenditure under subsection   159GF(3) reduced by an amount equal to the total notional principal in relation to the amount of expenditure in relation to the application period and any prior application period; and

  (c)   for the purposes of the application of:

  (ii)   section   40 - 830 of the Income Tax Assessment Act 1997 for a project amount that is mining capital expenditure within the meaning of that Act; or

  (iii)   Subdivision   40 - B of that Act for a depreciating asset that is a forestry road or timber mill building;

    in relation to an amount of expenditure (not being expenditure incurred after the application period) by reason of which the item is Division   10, 10AA or 10A property at any time after the application period, there shall be taken to have been allowed in respect of the amount of expenditure a deduction under whichever of those provisions applies in respect of the amount of expenditure of an amount equal to the total notional principal in relation to the amount of expenditure in relation to the application period.

  (3)   Where this Division   applies in relation to an item of Division   10AAA property:

  (a)   no deduction is allowable to any taxpayer under section   40 - 830 of the Income Tax Assessment Act 1997 for a project amount that is transport capital expenditure within the meaning of that Act in relation to any amount of expenditure (not being expenditure incurred after the application period) by reason of which the item is Division   10AAA property for any year of income in which the whole or a part of the application period occurs; and

  (b)   the residual amount at any time after the application period (not being a time after the commencement of a subsequent application period) in relation to an amount of expenditure (not being expenditure incurred after the application period) by reason of which the item is Division   10AAA property is an amount equal to the amount that, but for this paragraph, would be the residual amount at that time in relation to the amount of expenditure under subsection   159GF(4) reduced by an amount equal to the total notional principal in relation to the amount of expenditure in relation to the application period and any prior application period; and

  (c)   for the purposes of the application of section   40 - 830 of the Income Tax Assessment Act 1997 , for a project amount that is transport capital expenditure within the meaning of that Act, in relation to an amount of expenditure (not being expenditure incurred after the application period) by reason of which the item is Division   10AAA property for any year of income after the year of income in which this Division   ceases to apply--it is taken to be a requirement of that section that the deduction allowable under that section in respect of the amount of expenditure does not exceed the residual amount in relation to the amount of expenditure as worked out in accordance with paragraph   (b).

  (4)   Where this Division   applies in relation to an item of Division   10C or 10D property:

  (a)   in relation to any year of income the whole of which is included in or comprises the application period--no deduction shall be allowable to any taxpayer under Division   43 of the Income Tax Assessment Act 1997 , in relation to any amount of expenditure by reason of which the item is Division   10C or 10D property for that year of income;

  (b)   in relation to any other year of income in which the whole or a part of the application period occurs:

  (i)   in relation to any part (in this subsection referred to as the pre - application part ) of the year of income that precedes the application period--there shall be allowable to the taxpayer as a deduction under Division   43 of the Income Tax Assessment Act 1997 in relation to an amount of expenditure by reason of which the item is Division   10C or 10D property:

  (A)   where this Division   has not previously applied in relation to the amount of expenditure--the same deduction (if any) as would, apart from this Division, be allowable under that Division; and

  (B)   in any other case--the same deduction (if any) as would, but for this application of this section, be allowable under that Division;

  (ii)   in relation to the part of the year of income during which this Division   applies--no deduction shall be allowable to any taxpayer under Division   43 of the Income Tax Assessment Act 1997 in relation to any amount of expenditure by reason of which the item is Division   10C or 10D property; and

  (iii)   in relation to any part (in this subsection referred to as the post - application part ) of the year of income that occurs after the application period (not being a part that occurs after the commencement of a subsequent application period):

  (A)   the residual amount at any time during the post - application part   in relation to an amount of expenditure (not being expenditure incurred after the application period) by reason of which the item is Division   10C or 10D property is an amount equal to the amount that, but for this paragraph, would be the residual amount at that time in relation to the amount of expenditure under subsection   159GF(5) reduced by an amount equal to the total notional principal in relation to the amount of expenditure in relation to the application period and any prior application period; and

  (C)   the deduction (if any) allowable to a taxpayer in relation to an amount of expenditure (not being expenditure incurred after the application period) by reason of which the item is Division   10C or 10D property under Division   43 of the Income Tax Assessment Act 1997 in relation to the post - application part   is the deduction (if any) that would be allowable to the taxpayer under that Division   in respect of that period if this Division   (other than this sub - subparagraph) did not apply and if it were a requirement of that Division   that the deduction did not exceed the residual amount in relation to the amount of expenditure as ascertained in accordance with sub - subparagraph   (A);

  (c)   the residual amount at any time after the year of income in which the application period ends (not being a time after the commencement of a subsequent application period) in relation to an amount of expenditure (not being expenditure incurred after the application period) by reason of which the item is Division   10C or 10D property is the amount that, but for this paragraph, would be the residual amount at that time in relation to the amount of expenditure under subsection   159GF (5) reduced by an amount equal to the total notional principal in relation to the amount of expenditure in relation to the application period and any prior application period; and

  (d)   in the application of Division   43 of the Income Tax Assessment Act 1997 in relation to any year of income after the year of income in which this Division   ceases to apply, in relation to an amount of expenditure (not being expenditure incurred after the application period) by reason of which the item is Division   10C or 10D property it shall be taken to be a requirement of Division   43 of the Income Tax Assessment Act 1997 that the deduction (if any) allowable to a taxpayer under that Division   in respect of the amount of expenditure does not exceed the residual amount in relation to the amount of expenditure as ascertained in accordance with paragraph   (c).

  (5)   If this Division   applies in relation to an item of property that is an eligible spectrum licence:

  (a)   an amount cannot be deducted under Division   40 of the Income Tax Assessment Act 1997 in relation to any amount of expenditure (other than expenditure incurred after the application period) by reason of which the item is an eligible spectrum licence for any year of income in which any of the application period occurs; and

  (b)   the residual amount at any time after the application period (but before the start of a later application period) in relation to an amount of expenditure (other than expenditure incurred after the application period) because of which the item is an eligible spectrum licence is an amount equal to:

    the amount that, if not for this paragraph, would be the residual amount at that time in relation to the amount of expenditure under subsection   159GF(6);

    reduced by:

    an amount equal to the total notional principal in relation to the amount of expenditure in relation to the application period and any prior application period; and

  (c)   for the purposes of applying Division   40 of the Income Tax Assessment Act 1997 in relation to an amount of expenditure (other than expenditure incurred after the application period) because of which the item is an eligible spectrum licence at any time after the application period, a deduction under that Division   is taken to have been allowed, for the amount of expenditure, of an amount equal to the total notional principal in relation to the amount of expenditure in relation to the application period.

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