INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART XII - DROUGHT INVESTMENT ALLOWANCE  

Division 5 - Special provisions about primary producers  

Subdivision B - Group companies  

SECTION 658   DEDUCTION NOT LOST TO PRIMARY PRODUCER DESPITE LEASING ETC. ITEM DURING 12 MONTH PERIOD  

658(1)   When section applies.  

This section applies if the taxpayer is a company that would lose the entitlement to the deduction to which Division 2 applies:

(a) under paragraph 633(5)(a) because the taxpayer leased the item of drought mitigation property to another person; or

(b) under paragraph 633(5)(c) because the taxpayer granted rights to another person to use the item;

and the other person is a group company (see section 682 ) of the taxpayer.

658(2)   Conditions for not losing the deduction.  

The taxpayer does not lose the entitlement to the deduction if, at all times during the required period (see subsection (3)):

(a) the group company remains a group company of the taxpayer; and

(b) the group company uses the item wholly and exclusively both in Australia and for the purpose of producing assessable primary production income other than by:

(i) leasing the item; or

(ii) otherwise granting a right to another person to use the item.

658(3)   The required period.  

The required period is so much of the term of the lease or period of the grant as happens before the end of the period of 12 months after the taxpayer first uses the item or installs it ready for use.