Capital Cost Allowances
19.A74. Certain assets qualify for accelerated capital cost allowances. The assets must be acquired before a new mine produces in commercial quantities or the major expansion of an existing mine. This replaced a three-year exemption for the income of new mines. In general terms, assets qualifying for this allowance are ordinarily depreciable and comprise:
- (a) a building (except an office building not situated on the mine property);
- (b) mining machinery and equipment;
- (c) electrical plant; and
- (d) community and transportation facilities—for example, airport, dam, hall, hospital, house, power-line, recreational facilities—analogous to the ‘housing and welfare’ deductions under the Australian Act.
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The rate of depreciation which may be claimed is 30 per cent of the undepreciated balance of each class of asset. Alternatively, taxpayers may claim a deduction for the full amount of the undepreciated capital cost up to the amount of income from the mine (before deducting depletion or any other allowance).