Section DU 3 — Income Tax Act 2007: Replacing or repairing asset

DU 3 Replacing or repairing asset When subsections (2) to (4) apply (1) Subsections (2) to (4) apply when— (a) a mining company complies with section CU 6(2) (Compensation and scrap payment: use to replace or repair asset); and (b) the company incurs expenditure in replacing or repairing the asset; and (c) the company has an excess amount because the expenditure is more than the total of— (i) the amount of insurance, indemnity, or compensation paid; and (ii) the amount, if any, payable to the company for the disposal of any scrap of the asset. Deduction (2) The company is allowed a deduction for the excess. Mining expenditure (3) The excess amount must be taken into account in the mining expenditure item of the formula in section DU 7(5) . No other deduction (4) No other deduction for expenditure incurred in the circumstances described in subsection (1) is allowed under any other provision of this Act. When subsections (7) and (8) apply (5) Subsections (7) and (8) apply when— (a) a mining company complies with section CU 6(2) ; and (b) the Commissioner considers a period to be a reasonable period within which to complete the replacement or repair; and (c) the company incurs expenditure in replacing or repairing the asset after the last day of the period; and (d) the company has an excess amount because the expenditure is more than the total of the following: (i) the amount of compensation paid; and (ii) the amount, if any, payable to the company for the disposal of any scrap of the asset. Deduction (6) The company is allowed a deduction for the excess. Limitation on calculation of excess amount (7) The expenditure incurred after the last day of the period must not be taken into account to determine the existence or amount of an excess amount for the purposes of subsection (1)(c). Mining expenditure (8) The expenditure incurred after the last day of the period must be taken into account in the mining expenditure item of the formula in section DU 7(5) . Link with subpart DA (9) This section supplements the general permission and overrides the capital limitation. The other general limitations still apply. Defined in this Act: amount , capital limitation , Commissioner , deduction , general limitation , general permission , mining company , pay , supplement , Compare: 2004 No 35 s DU 3