Income tax: when is the construction cost of an access road incurred by a person carrying on timber operations for the purpose of gaining or producing assessable income an allowable deduction?

Section 124E of the Income Tax Assessment Act 1936 defines 'access road' as meaning a road (including a bridge, culvert or similiar work forming part of the road) constructed primarily and principally for the purpose of providing access to an area so as to enable: (a) the planting or tending of trees in the area; or (b) the removal from the area of timber felled in the area; and defines 'timber operations' as meaning: (a) the planting or tending of trees for felling; (b) the felling of standing timber; (c) the removal of felled timber; or (d) the milling or other processing of felled timber.

Subsection 124F(1) allows a deduction for the construction cost of an access road (as defined) incurred by a person in connection with the carrying on by him of timber operations (as defined) for the purpose of gaining or producing asessable income.

Under subsection 124F(2) the construction cost is deductible by equal annual instalments over the estimated useful life of the access road, or 25 years, whichever is the less.