39Closing‑down expenditure

#### 39 Closing‑down expenditure (1) For the purposes of this Act, a reference to closing‑down expenditure incurred by a person in relation to a petroleum project is a reference to payments (not being excluded expenditure), whether of a capital or revenue nature, to the extent that they are made by the person in carrying on operations involved in closing down the project, including in any environmental restoration as a consequence of closing down the project. (2) For the purposes of this Act, if: (a) on the termination of a petroleum project, a person disposes of all of the person’s property in respect of which the person incurred capital expenditure that is eligible real expenditure in relation to the project; and (b) there is no consideration receivable by the person in respect of the disposal; a reference to the closing‑down expenditure incurred by the person in relation to the project includes a reference to any consideration given by the person for the disposal, to the extent that the consideration relates to the future closing‑down expenditure in relation to the project. (3) For the purposes of this Act, if a person’s assessable property receipts under paragraph 27(1)(b) in relation to a petroleum project are taken to be zero because of subsection 27(4), a reference to closing‑down expenditure incurred by a person in relation to the project includes a reference to an amount equal to the difference between: (a) the future closing‑down expenditure in relation to the project; and (b) the amount that would, but for subsections 27(3) and (4), have been the person’s assessable property receipts in relation to the project. > Note: Example: A production licence of Petgas Ltd ceases to be in force on 24 October 2006, but the use of some facilities of the petroleum project in question continues to be permitted by an infrastructure licence that comes into force on that day. The value of the facilities on that day is $240,000, but there are future closing‑down costs that result in Petgas Ltd having a future closing‑down expenditure of $360,000. > Note: Under subsection 27(4), Petgas Ltd’s assessable property receipts under paragraph 27(1)(b) are taken to be zero. In addition, Petgas Ltd’s closing‑down expenditure includes an amount of $120,000 (the difference between its future closing‑down expenditure and the actual value of the facilities). (4) Closing‑down expenditure in relation to a petroleum project does not include closing‑down expenditure in relation to operations, facilities or other things comprising the project to the extent that: (a) the person has previously had assessable property receipts under paragraph 27(1)(a) in relation to the project and the consideration referred to in that paragraph took into account future closing‑down expenditure that relates to those operations, facilities or other things; or (b) the person has previously had assessable property receipts under paragraph 27(1)(b) in relation to the project and such future closing‑down expenditure was taken into account in working out those assessable property receipts; or (c) the person has previously had closing‑down expenditure in relation to the project that included such future closing‑down expenditure. However, this subsection does not apply if there has been a change in the ownership of those operations, facilities or other things after the assessable property receipts or closing‑down expenditure arose. (5) For the purposes of this section, a person is taken to make a payment when the person becomes liable to make the payment.