INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART IIIA - CAPITAL GAINS AND CAPITAL LOSSES  

Division 5 - Leases  

SECTION 160ZT   PAYMENTS FOR VARIATION OF LEASE  

160ZT(1)   [Expenditure incurred by lessor]  

For the purposes of this Part, if the lessor under a lease of property incurs expenditure in obtaining the consent of the lessee to the variation or waiver of any of the terms of the lease, the lessor is taken to have incurred a capital loss equal to the amount of that expenditure.

160ZT(1A)   [Deemed consideration for the lease]  

For the purposes of this Part, if:

(a) the lessor under a lease of property incurs expenditure in obtaining the consent of the lessee to the variation or waiver of any of the terms of the lease; and

(b) the lessee receives an amount (in this subsection called the ``consent amount'' ) from the lessor in respect of the giving by the lessee of consent to the variation or waiver; and

(c) the lease was acquired by the lessee on or after 20 September 1985;

then:

(d) if, assuming that the lessee had disposed of the lease at the time the waiver or variation was made, the indexed cost base to the lessee of the lease would not have exceeded the consent amount - the lessee is taken:

(i) to have disposed of the lease at that time for a consideration equal to the consent amount; and

(ii) to have immediately re-acquired the lease for no consideration; or

(e) if, assuming that the lessee had disposed of the lease at the time the waiver or variation was made, the indexed cost base to the lessee of the lease would have exceeded the consent amount - the lessee is taken to have disposed of the lease at that time for a consideration equal to the amount of that indexed cost base and to have immediately re-acquired the lease:

(i) for the purpose of ascertaining whether a capital gain accrued to the lessee in the event of a subsequent disposal of the lease by the lessee - for a consideration equal to the amount by which that indexed cost base exceeded the consent amount; or

(ii) for the purpose of ascertaining whether the lessee incurred a capital loss in the event of a subsequent disposal of the lease by the lessee - for a consideration equal to the amount by which the amount that, if the lessee had disposed of the lease at the time the waiver or variation was made, would have been the reduced cost base to the lessee in respect of the lease exceeds the consent amount.

160ZT(1B)   [Lease disposed of within 12 months]  

If the lessee disposed of the lease (otherwise than because of the application of subsection (1A)) within 12 months after the lessee acquired the lease (otherwise than because of the application of subsection (1A)), subsection (1A) has effect as if the references in that subsection to the indexed cost base to the lessee in respect of the lease were references to the cost base to the lessee in respect of the lease.

160ZT(2)   [Expenditure incurred by lessee]  

For the purposes of this Part, if the lessee under a lease of property incurs expenditure in obtaining the consent of the lessor to the variation or waiver of any of the terms of the lease -

(a) that expenditure shall be deemed to be expenditure of a capital nature incurred for the purpose of enhancing the value of the lease; and

(b) any amount received by the lessor in respect of the giving by the lessor of consent to the variation or waiver shall be deemed to be consideration received in respect of the disposal by the lessor of the right to consent to the variation or waiver.