INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART III - LIABILITY TO TAXATION  

Division 3 - Deductions  

Subdivision A - General  

SECTION 54AC   ELIGIBLE LESSOR - RIGHT OF REMOVAL OF PROPERTY  

54AC(1)   Right of removal .  

Where a unit of property is a fixture on land owned by the lessee of the property, then, for the purposes of subsection 54AB(1) , the lessor is an eligible lessor in relation to that property if:

(a) the lessor has a right, in addition to any other right, to sever and remove the property from the land in the event of default under, or termination of, the lease (a right to remove ); and

(b) the property can be removed without causing substantial damage to the property or to the land.

54AC(2)   Effective right of removal .  

Where the property is a fixture on land owned by a person other than the lessee, then, for the purposes of subsection 54AB(1) , the lessor is an eligible lessor in relation to the property if:

(a) the lessee has a right to sever and remove the property from the land; and

(b) the property can be removed without causing substantial damage to the property or to the land; and

(c) under the lease, the lessor has a right against the lessee to recover the property (an effective right to remove ).

54AC(3)   Lessor not an eligible lessor if right to remove, or effective right to remove, is lost .  

The lessor is not an eligible lessor in relation to the property if:

(a) although the lessor has a right to remove, or an effective right to remove, the property, the lease expires or is otherwise terminated without the lessor exercising that right; or

(b) there is an event of default under the lease and the lessor ceases to have a right to remove, or an effective right to remove, the property; or

(c) the lessor disposes of his or her interest in the lease, including the residual interest in the property; or

(d) the lessee discharges his or her obligations under the lease and the property is not returned to the lessor; or

(e) the property is lost or destroyed.