INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART XII - DROUGHT INVESTMENT ALLOWANCE  

Division 6 - Special provisions about leasing companies  

Subdivision B - Group companies  

SECTION 668   DEDUCTION NOT LOST TO LEASING COMPANY DESPITE LESSEE CONTRACT ETC. FOR USE OF ITEM WITHIN 12 MONTH PERIOD  

668(1)   When section applies.  

This section applies if the taxpayer would lose the entitlement to the deduction to which this Division applies:

(a) under paragraph 644(d) or 664(d) because the lessee entered into a contract or arrangement with another person for the use of the item of drought mitigation property by the other person; or

(b) under paragraph 644(f) or 664(f) because the lessee acquired the item of drought mitigation property and entered into a contract or arrangement with another person for its use by the other person;

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

668(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 lessee; 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.

668(3)   The required period.  

The required period is so much of the term of the contract or arrangement as happens before the end of the period of 12 months after the lessee first used the item or installed it ready for use.