Commonwealth Numbered Acts

TAXATION LAWS AMENDMENT ACT (No. 2) 1991No. 100, 1991 - SECT 39

39. After section 124AM of the Principal Act the following section is
inserted: Application of section 124AM before 1 July 1991 - subsequent use of
property for rehabilitation

"124AMA. (1) This section applies to property if:

   (a)  either of the following conditions is satisfied:

        (i)    the property is plant or articles for the purposes of section
               54;

        (ii)   expenditure on the property is covered by paragraph 124AA (2)
               (c), (d) or (e); and

   (b)  section 124AM has applied in respect of the termination of use of the
        property; and

   (c)  the date of the termination (in this section called the `section 124AM
        termination date') was before 1 July 1991; and

   (d)  no deduction is allowable, or has been allowed, in respect of the use
        of the property that occurred in the period commencing on the section
        124AM termination date and ending on 30 June 1991; and

   (e)  the taxpayer commences to use the property for rehabilitation-related
        activities on the day after the section 124AM termination date; and

   (f)  the taxpayer has not ceased to use the property for
        rehabilitation-related activities before 1 July 1991.

"(2) For the purposes of this section, the estimated eligible rehabilitation
period is the period:

   (a)  commencing on 1 July 1991; and

   (b)  ending on the day on which, as at 1 July 1991, it is estimated that
        the property will cease to be used by the taxpayer for
        rehabilitation-related activities.

"(3) If, having regard to information in the Commissioner's possession, the
Commissioner is not satisfied that the estimate is a reasonable estimate, the
estimated eligible rehabilitation period is taken to end on such day as the
Commissioner considers reasonable.

"(4) For the purposes of this section, the estimated total rehabilitation
period is the period:

   (a)  commencing on the day after the section 124AM termination date; and

   (b)  ending at the end of the estimated eligible rehabilitation period.

"(5) For the purposes of this section, the actual eligible rehabilitation
period is the period:

   (a)  commencing on 1 July 1991; and

   (b)  ending on the day on which the property is disposed of, lost or
        destroyed, or the use of which by the taxpayer for
        rehabilitation-related activities has been otherwise terminated.

"(6) For the purposes of this section, the actual total rehabilitation period
is the period:

   (a)  commencing on the day after the section 124am termination date; and

   (b)  ending at the end of the actual eligible rehabilitation period.

"(7) An amount calculated using the following formula is allowable as a
deduction to the taxpayer for each year of income any part of which occurs
during both the actual eligible rehabilitation period and the estimated
eligible rehabilitation period:
Eligible rehabilitation days
   Capital amount x            in year

Days in estimated total
rehabilitation period where: `Capital amount' means the capital amount in
relation to the property; `Eligible rehabilitation days in year' means the
number of days in so much of the year of income as occurs during both of the
actual eligible rehabilitation period and the estimated eligible
rehabilitation period; `Days in estimated total rehabilitation period' means
the number of days in the estimated total rehabilitation period.

"(8) Subsections (9) and (10) apply in relation to a year of income if:

   (a)  deductions are allowable, or have been allowed, under subsection (7)
        in respect of the property; and

   (b)  the actual eligible rehabilitation period ends in the year of income.

"(9) The amount (if any) calculated using the following formula is an
allowable deduction to the taxpayer for the year of income:
   Capital      Actual eligible rehabilitation days     Deductions

   amount   x        Days in actual total           -   previously

                     rehabilitation period              allowed
where: `Capital amount' means the capital amount in relation to the property;
`Actual eligible rehabilitation days' means the number of days in the actual
eligible rehabilitation period; `Days in actual total rehabilitation period'
means the number of days in the actual total rehabilitation period;
`Deductions previously allowed' means the total deductions that are allowable,
or have been allowed, under subsection (7) in respect of the property.

"(10) The amount (if any) calculated using the following formula is included
in the assessable income of the taxpayer of the year of income:
Actual eligible rehabilitation days
Final value  x           Days in actual total

rehabilitation period where: `Final value' means whichever of the following
amounts is applicable in relation to the property:

   (a)  in the case of the disposal, loss or destruction of the property - the
        consideration receivable in respect of the disposal, loss or
        destruction; or

   (b)  in the case of other termination of the use of the property - the
        value of the property at the end of the actual eligible rehabilitation
        period; `Actual eligible rehabilitation days' means the number of days
        in the actual eligible rehabilitation period; `Days in actual total
        rehabilitation period' means the number of days in the actual total
        rehabilitation period.

"(11) A reference in this section to use of property by a taxpayer for a
particular purpose includes a reference to the holding in reserve of property
owned by the taxpayer which has been installed ready for use for that purpose.

"(12) Where an amount is included in the assessable income of a taxpayer under
subsection (10), the amount is taken to be assessable income from petroleum.

"(13) In this section: `actual eligible rehabilitation period' has the meaning
given by subsection (5); `actual total rehabilitation period' has the meaning
given by subsection (6); `capital amount', in relation to property, means the
lesser of:

   (a)  the total expenditure of a capital nature of the taxpayer in respect
        of the property; and

   (b)  the value of the property as at the section 124AM termination date;
        `estimated eligible rehabilitation period' has the meaning given by
        subsection (2); `estimated total rehabilitation period' has the
        meaning given by subsection (4); `rehabilitation-related activities'
        has the same meaning as in Division 10AB; `section 124AM termination
        date' has the meaning given by subsection (1).".